What We Know About Trump and Clinton's Treasury Picks
What We Know About Trump and Clinton's Treasury Picks
Clinton has been defending herself from accusations that she is too cozy with Wall Street since the primaries, when an obscure U.S. senator from Vermont built a movement in part by blasting her...
Clinton has been defending herself from accusations that she is too cozy with Wall Street since the primaries, when an obscure U.S. senator from Vermont built a movement in part by blasting her for collecting chunky speaking fees from Goldman Sachs Group Inc. (GS). Trump has carried on with that line of attack, telling an Iowa rally in late September, "if she ever got the chance, she'd put the Oval Office up for sale." So it may seem odd that Trump's campaign finance chair and apparent favorite for the Secretary of the Treasury, according to a Fox Business report on November 3rd, is second-generation Goldman Sachs partner Steve Mnuchin.
There is less clarity about who Clinton would nominate if she won, perhaps because she has to contend with skepticism of capitalism-as-usual among fans of Bernie Sanders and Elizabeth Warren, without veering too far to the left of the general electorate. Two names tend to pop up, however: Facebook Inc. (FB) COO and Lean In author Sheryl Sandberg, followed by Federal Reserve Board Governor Lael Brainard. Other possibilities include TIAA CEO and Alphabet Inc. (GOOGL, GOOG) board member Roger Ferguson.
Trump: Mnuchin
Steve Mnuchin may not seem to be the obvious choice to fashion economic policy for a populist, anti-establishment campaign like Trump's. Before taking over as the Republican's campaign finance chair in May, Mnuchin pursued a varied career as an investment banker, hedge fund manager, retail bank owner and film producer. (See also, Trump Announces New Economic Advisory Team.)
After graduating from Yale, where he roomed with Sears Holdings Corp.'s (SHLD) current CEO Edward Lampert, Mnuchin cut his teeth at Salomon Brothers. He joined Goldman Sachs, where his father was a partner, in 1985. According to a 2012 Bloomberg profile, Mnuchin was "front and center" when instruments such as collateralized debt obligations and credit default swaps were created. Fairly or unfairly, such exotic securities carry a whiff of the financial crisis, as does Goldman Sachs' mortgage department, which Mnuchin headed for a spell before becoming chief information officer in 1999.
He left Goldman Sachs in 2002 to work at his college roommate's hedge fund. The next year he started another fund with George Soros, and a year after that he formed Dune Capital with two other Goldman alums. This period marked the beginning of Mnuchin's Hollywood career, with Dune Capital's production wing funding dozens of films including Mad Max: Fury Road, American Sniper and Avatar.
Mnuchin's biggest financial opportunity came with the collapse of the subprime mortgage bubble. "In 2008 the world was a scary place," Mnuchin told Bloomberg in 2012. The market for mortgage-backed securities, with which he was intimately familiar, had collapsed, and no one seemed able to assign a value to assets such as IndyMac, a bank the FDIC had taken over. Mnuchin and a consortium of private equity investors he managed to woo over, including Soros, bought it on the cheap. The deal included a loss-sharing agreement with the FDIC. They renamed the bank OneWest and began foreclosing on borrowers, attracting criticism from campaigners who portrayed it as overly zealous and possibly driven by a profit incentive – born of the loss-sharing agreement – to foreclose rather than pursuing other options. (See also, Lessons Learned from the Banking Crisis.)
Mnuchin has donated to Clinton in the past, as has Trump. Speaking to Bloomberg in August, though, he was on message: "she's obviously raised a ton of money in speaking fees, in other things, from special interest groups. This campaign is focused on people who want to help rebuild the economy."
Clinton: Sandberg, Brainard or Ferguson
Clinton suggested at a town hall meeting in April that she plans to fill half of her cabinet with women. Most reports regarding her pick for Treasury secretary, a position that has never been filled by a woman, mentioned Facebook's Sheryl Sanderberg and the Fed's Lael Brainard. Another, less-frequently mentioned name is Roger Ferguson, who would be the first African-American to hold the job.
Sandberg
Sandberg has Treasury Department experience. Before becoming one of the most successful women in notoriously macho Silicon Valley, she served as chief of staff to Bill Clinton's Treasury Secretary Larry Summers. She received her BA and MBA from Harvard in the 1990s and spent a year at McKinsey & Co. She worked for Summers, who had been her professor at Harvard, from 1996 to 2001, which offered her the experience of dealing with the Asian financial crisis. She spent the next seven years as a vice-president of Google, then Mark Zuckerberg hired her away as Facebook's chief operating officer. Within two years she had turned the company profitable. In 2012 she became the first female member of Facebook's board. (See also, Who Is Driving Facebook's Management Team?)
Sandberg has also become an icon for some feminists for her 2013 book Lean In – and its attendant hashtag – which documents the barriers women face in the workplace while encouraging them to dispense with internalized barriers, fears and excuses that hold them back. Despite a generally enthusiastic reception, some critics have labeled the book as elitist: the opportunity to network at Davos may have made Sandberg's barrier-breaking easier. (See also, Sheryl Sandberg's Latest Speech Goes Viral.)
Brainard
Lael Brainard spent part of her childhood in communist East Germany and Poland with her diplomat father. She studied at Wesleyan and went on to get a masters and a doctorate in economics from Harvard. She taught at MIT's Sloan School of Management and worked at McKinsey before joining the Clinton administration as deputy director of the National Economic Council. She went to work at the Brookings Institution during the Bush administration, then served in Obama's Treasury as undersecretary for international affairs. At that time, that position – often described as the Treasury's top diplomat – was the highest Treasury post a woman had held. (See also, Fed's Brainard Urges Caution on Interest Rate Hike.)
Brainard has been a member of the Federal Reserve Board of Governors since June 2014, where she's attracted praise from progressives and deep suspicion from conservatives for appearing to depart from the central bank's technocratic, apolitical norms. She engaged with "Fed Up" activists protesting plans to tighten monetary policy at August's Jackson Hole meeting. (See also, Rising U.S. Labor Productivity Cements Fed Hike.)
Brainard also gave the maximum amount of $2,700 to Hillary Clinton's campaign. That decision earned furious condemnation from Republican members of the House Financial Services Committee during Fed chair Janet Yellen's September testimony, which came just two days after Trump accused the Fed of "doing political things" at the first presidential debate. Yellen defended Brainard's donation, saying she had not violated the Hatch Act, which prohibits federal employees in the executive branch from engaging in certain political activities.
Ferguson
Roger Ferguson earned a BA, JD and Ph. D in economics from Harvard then worked as an attorney in New York from 1981 to 1984. He spent the following 13 years at McKinsey, then joined the Fed Board of Governors in 1997. He became vice chair two years later, and rumors began to swirl in 2005 that he would be the next chair. Bush nominated Ben Bernanke instead, and Ferguson resigned shortly after Bernanke's term began the following February.
In 2008 he became president and CEO of Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF, since shortened to TIAA). He has been a board member of Alphabet since June 2016.
By David Floyd
Source
Trump expected to nominate Powell for Fed chair
Trump expected to nominate Powell for Fed chair
Most on Wall Street welcomed the news that Powell is the likely nominee. Investment bank Deutsche Bank put out a note last week to clients saying Powell would be the best choice if Trump did not...
Most on Wall Street welcomed the news that Powell is the likely nominee. Investment bank Deutsche Bank put out a note last week to clients saying Powell would be the best choice if Trump did not want to keep Yellen on. But some liberal groups, including Fed Up, were disappointed and see the selection of Powell as an attempt to make the Fed more favorable to big banks. "Jerome Powell's most important qualification is that he served with Janet Yellen. His confirmation should depend on his willingness to follow in Yellen's footsteps on both monetary and regulatory policy," said Shawn Sebastian, co-director of Fed Up, a campaign from the Center for Popular Democracy.
Read the full article here.
Fed chairman defends interest rate hikes as Trump’s attacks show no sign of working
Fed chairman defends interest rate hikes as Trump’s attacks show no sign of working
Several protesters from the progressive group Fed Up stood outside the conference room where Powell delivered the speech. Much like Trump, they say raising rates again will harm working people’s...
Several protesters from the progressive group Fed Up stood outside the conference room where Powell delivered the speech. Much like Trump, they say raising rates again will harm working people’s chances of getting jobs and better pay. The protesters wore green T-shirts reading “The Fed wants more of us unemployed.
Read the full article here.
Former Fed Adviser, Activists Lay Out a Plan for Change at the Fed
Former Fed Adviser, Activists Lay Out a Plan for Change at the Fed
A former Federal Reserve adviser is joining with an activist group to argue for overhauls at the central bank that they say would distance it from Wall Street and make its activities more...
A former Federal Reserve adviser is joining with an activist group to argue for overhauls at the central bank that they say would distance it from Wall Street and make its activities more transparent and accountable to the public.
Dartmouth College economics professor Andrew Levin—special adviser to Ben Bernanke and Janet Yellen between 2010 and 2012 when they were Fed chairman and vice chairwoman—is pressing for the overhaul with Fed Up coalition activists.
Dartmouth College economics professor Andrew Levin, special adviser to then Fed Chairman Ben Bernanke between 2010 to 2012, is pressing for the overhaul with Fed Up coalition activists. Many of the proposed changes target the 12 regional Federal Reserve Banks, which are quasi-private and technically owned by commercial banks in their respective districts.
“A lot of people would be stunned to know” the extent to which the Federal Reserve is privately owned, Mr. Levin said. The Fed “should be a fully public institution just like every other central bank” in the developed world, he said in a conference call announcing the plan. He described his proposals as “sensible, pragmatic and nonpartisan.”
The former central bank staffer said he sees his ideas as designed to maintain the virtues the central bank already brings to the table. They aren’t targeted at changing how policy is conducted today. “What’s important here is that reform to the Federal Reserve can last for 100 years, not just the near term,” he said.
That said, what is being sought by Mr. Levin and the activists is significant and would require congressional action. Ady Barkan, who leads the Fed Up campaign, said the Fed’s current structure “is an embarrassment to America” and Fed leaders haven’t been “willing or able” to make changes.
A Federal Reserve spokesman declined to address the proposal.
Mr. Levin wants the 12 regional Fed banks to be brought fully into the government. He also wants the process of selecting new bank presidents—they are key regulators and contributors in setting interest-rate policy—opened up more fully to public input, as well as term limits for Fed officials.
Mr. Levin’s proposal was made in conjunction with the Center for Popular Democracy’s Fed Up coalition, a group that has been pressuring the central bank for more accountability for some time. The left-leaning group has been critical of the structure of the regional banks, and has been pressing the Fed to hold off on raising rates in a bid to make sure the recovery is enjoyed not just by the wealthy, in their view.
The proposal was revealed on a conference call that also included a representative from Bernie Sanders’s presidential campaign, although all campaigns were invited to participate.
Mr. Levin says the members of the regional Fed bank boards of directors, the majority of whom are selected by the private banks with the approval of the Washington-based governors, should be chosen differently. The professor says director slots now reserved for financial professionals regulated by the Fed should be eliminated, and that directors who oversee and advise the regional banks should be selected in a public process involving the Washington governors and local elected officials. These directors also should better represent the diversity of the U.S.
Mr. Levin also wants formal public input into the selection of new bank presidents, with candidates’ names known publicly and a process that allows for public comment in a way that doesn’t now exist. The professor also wants all Fed officials to serve for single seven-year terms, which would give them the needed distance from the political process while eliminating situations where some policy makers stay at the bank for decades. Alan Greenspan, for example, was Fed chairman from 1987 to 2006.
With multiple vacancies in recent years, the selection of regional bank presidents has become a hot-button issue. Currently, the leaders of the New York, Philadelphia, Dallas and Minneapolis Fed banks are helmed by men who formerly worked for or had close connections to investment bank Goldman Sachs.
Mr. Levin called for watchdog agency the Government Accountability Office to annually review and report on Fed operations, including the regional Fed banks. He also wants the regional Fed banks to be covered under the Freedom of Information Act. A regular annual review hopefully would insulate the effort from perceptions of political interference, Mr. Levin said.
By Michael S. Derby
Source
New Report: Big Banks Require Tellers to Use Predatory Practices
Bill Moyers & Company - April 9, 2015, by Katie Rose Quandt - Front-line workers at our nation’s big banks — tellers, loan interviewers and customer service representatives — are required by...
Bill Moyers & Company - April 9, 2015, by Katie Rose Quandt - Front-line workers at our nation’s big banks — tellers, loan interviewers and customer service representatives — are required by their employers to exploit customers, according to a revealing report out today from the Center for Popular Democracy (CPD). Big banks have internal systems of penalties and rewards that entice employees to push subprime loans and credit cards on customers who would be better off without them.
CPD’s report outlines several illegal predatory practices big banks have been caught employing, usually via their front-line workers:
Blatantly discriminatory lending: In 2011 and 2012, Bank of America and Wells Fargo paid out settlements for charging higher rates and fees to tens of thousands of African American and Hispanic borrowers than to similarly qualified white customers. Minority customers were also more likely to be steered into (more expensive, riskier) subprime mortgages.
Manipulating payment processing to maximize overdraft charges: When a savings account balance drops too low, the bank charges a hefty overdraft fee on each subsequent purchase. Both Bank of America and US Bank paid settlements for intentionally processing customers’ largest debit card payments first, regardless of chronological order, in order to hit $0 faster and maximize overdraft fees. US Bank was also accused of allowing debit card purchases on zero-balance accounts to go through (and incur overdraft fees), instead of denying the charges upfront.
Forcing sale of unneeded products: Wells Fargo, JP Morgan Chase and Citigroup were accused of forcing customers to purchase overpriced property insurance.
Manipulative sales quotas: Lawsuits show Wells Fargo and Bank of America created incentive programs for employees with the interests of the company — not the customer — in mind. Wells Fargo’s sales quotas encouraged bank workers to steer prime-eligible customers to subprime loans, while falsifying other clients’ income information without their knowledge. Bank of America’s “Hustle” program rewarded quantity over quality, encouraging workers to skip processes and checks intended to protect the borrower.
Instead of cutting back on the risky, unethical practices that led to the Great Recession, the CPD report asserts that big banks have not learned from their mistakes. Bank workers report higher levels of sales pressure in 2013 than in 2008, and most do not have the job security or seniority to simply refuse to hawk credit cards or steer customers into risky financial situations. While the financial sector is turning near-record profits, the average bank teller made just $12.25 an hour in 2013 (a real-dollar decrease from 2007), causing 31 percent of tellers’ families to rely on public assistance. What’s more, 85 percent of these underpaid front-line bank employees are women, and one-third are people of color. Most are in no position to risk losing their job or having their pay docked for stepping out of line.
Several anonymous big bank employees went into detail about how their employers incentivize sales:
An HSBC employee reported that when workers fell short of sales goals, the difference was taken out of their paychecks.
A teller at a major bank said she is expected to sell three new checking, savings, or debit card accounts every day. If she falls short, she gets written up.
Customer service representatives at one major bank’s call-center said everyone is expected to make at least 40 percent of the sales of the top seller. Credit card sales count for extra, encouraging callers to push credit cards on customers who would be better served with checking or savings accounts.
A call-center worker said she offers a credit card to every customer, regardless of whether it would be beneficial. She explained: “If you aren’t offering, you can get marked down — the managers and Quality Analysts listen to your call, and can tell if you aren’t offering.”
“We’re not servicing their needs,” said one front-line worker. “What they want, what they need, isn’t important to us. Selling them a product is … Some of our customers just have their savings, many are just retirees.”
As the report concludes, “Our nation’s big banks are committed to a model that jeopardizes our communities and prevents bank employees from having a voice in their workplace.”
Source
The Week Ahead in New York Politics, May 21
The Week Ahead in New York Politics, May 21
On Monday at 11 a.m. at City Hall Park, “Representative Adriano Espaillat (NY-13), joined by New York State Assemblyman Marco Crespo and community leaders, will hold a press conference calling for...
On Monday at 11 a.m. at City Hall Park, “Representative Adriano Espaillat (NY-13), joined by New York State Assemblyman Marco Crespo and community leaders, will hold a press conference calling for secure housing for residents of Puerto Rico in support of the Housing Victims of Major Disasters Act, introduced by Rep. Espaillat earlier this Congress.” Other participants will include former City Council Speaker Melissa Mark Viverito, Frankie Miranda of Hispanic Federation, and Ana María Archila of Center for Popular Democracy, among others.
Read the full article here.
Undocumented immigrants deported 5.9 million provincial legal aid funding
World Journal - November 8, 2013, by Luohui Qi - New York City this summer from the city council was set aside $ 500,000 to establish the nation's first publicly-provided legal assistance to...
World Journal - November 8, 2013, by Luohui Qi - New York City this summer from the city council was set aside $ 500,000 to establish the nation's first publicly-provided legal assistance to undocumented immigrants pilot program, called "Project New York immigrant family reunification" (New York Immigrant Family Unity Project), the project officially launched this week. Multiple agencies involved in advocacy on the 7th released the latest report noted that such projects be extended to the whole of New York, an annual savings of up to 5.9 million yuan for the government's detention and deportation of undocumented immigrants hidden costs.
Non-profit agencies involved in advocating for one year, "the New York immigrant family reunification program" includes mass democracy Center (Center for Popular Democracy), the North Manhattan Immigrant Rights Coalition (Northern Manhatttan Coalition forImmigration Rights), make New York the road, "Make the Road New York "and the Cardozo School of Law (Cardozo School of Law) Greenberg Immigration Justice Research Institute (Kathryn O. Greenberg Immigration Justice Clinic). They published the 7th "New York immigrant family reunion project: suitable for families, suitable employer for all New Yorkers." (The New York Immigrant Family Unity Project: Good for Families, Good for Employers, and Good for All New Yorkers) reports.
The report notes that the project is indeed a legal advisory network, funding of $ 500,000 per year is expected to be about 1,800 low-income, detained and facing deportation of undocumented immigration services to provide basic legal assistance to them, such as translation, social workers and investigation. Record lawyers seeking assistance from immigration court objects, such as the case during the trial, the defendant meets the conditions and requirements of the project, these people will get the initiative to contact a lawyer.
The report also pointed out that due to the state capital every year detention and deportation of undocumented immigrants spend 13.4 million yuan, such as the annual 7.4 million yuan invested in the project - the state's taxpayers liable only 0.78 yuan per share, will be able to save 5.9 million spending. These agencies believe that now that the project has commenced, with the report was published, the project will increase the likelihood of expansion. These institutions will share the report with state officials and other analysis to allow more undocumented immigrants and their families can get equal treatment before the law.
Debbie Wasserman Schultz’s Challenger Has a Chance
During the presidential primary, Democratic National Committee Chair Debbie Wasserman Schultz has managed the impressive feat of angering virtually every liberal in America. Bernie Sanders ...
During the presidential primary, Democratic National Committee Chair Debbie Wasserman Schultz has managed the impressive feat of angering virtually every liberal in America. Bernie Sanders supporters think she displays a transparent biasfor Hillary Clinton. Party stalwarts, including Clinton fans, criticize the decision tohide primary debates on weekend nights, ceding hours of free media time to Republicans in the formative stages of the election. And in a recent interview with the New York Times Magazine, Wasserman Schultz insulted millennial women for being “complacent” about abortion rights. This is an incomplete list.
In two separate petitions, more than 94,000 people have demanded that Wasserman Schultz resign as DNC chair. But back in her district, in Hollywood, Florida, Timothy Canova has another idea: vote her out of office.
Last Thursday, Canova, a former aide to the late Sen. Paul Tsongas and a professor at Nova Southeastern University’s Shepard Broad College of Law, jumped into the Democratic primary in Florida’s 23rd congressional district. It’s Wasserman Schultz’s first primary challenge ever, and with frustration running high against her, it’s almost certain to draw national attention. But Canova first became interested in challenging Wasserman Schultz not because of her actions as DNC chair, but because of her record.
“This is the most liberal county in all of Florida,” Canova said in an interview, referring to Broward County, where most of Wasserman Schultz’s district resides (a small portion is in northern Miami-Dade County). But she more closely associates with her significant support from corporate donors, Canova argued. He listed several of Wasserman Schultz’s votes, such as blocking the SEC and IRS from disclosing corporate political spending (which was part of last month’s omnibus spending bill),opposing a medical marijuana ballot measure that got 58 percent of the vote in Florida, preventing the Consumer Financial Protection Bureau from regulating discrimination in auto lending and opposing their rules cracking down on payday lending, and supporting “fast track” authority for trade deals like the Trans-Pacific Partnership.
“I think anyone who voted for fast track should be primaried. I believe that ordinary citizens have to step up,” Canova said.
Canova espouses many of the populist themes that attract the left: fighting corporate power, defending organized labor, and reducing income inequality. But this is not just a Bernie Sanders Democrat. You have to go back further. Tim Canova is a Marriner Eccles Democrat.
Eccles chaired the Federal Reserve during Franklin Roosevelt’s presidency. And Canova believes the central bank should revisit Eccles’s unorthodox strategies to jump-start a broad-based economic recovery. “In the 1930s, the regional Fed banks made loans directly to the people,” Canova said. “Instead of purchasing $4 trillion in Treasuries and mortgage-backed securities, [the Fed] could buy short-term municipal bonds and drive the yield to zero for state and local governments. They could push money into infrastructure, making loans to state infrastructure banks.” Canova has even suggested that the government create currency outside of the central bank, breaking their monopoly on the money supply, as President Abraham Lincoln did with the “Greenback” in the 1860s.
During World War II, FDR directed Eccles’s Fed to finance American war debt at low rates, eventually producing a stimulus that helped to end the Great Depression. It was a time when the Fed was far more accountable to democratically elected institutions, one that Canova looks back upon fondly. “People like to talk about the Fed’s independence, that’s really a cover for the Fed’s capture,” he said. “They look out for elite groups in society, and the hell with everybody else.”
A growing faction of progressives are beginning to return to their roots, asking whether Fed policies truly support the public interest. The Fed Up campaign, with which Canova has consulted, seeks to pressure the Fed to adopt pro-worker policies. A surprise movement in Congress just cut a 100 year-old subsidy the Fed handed out to banks by $7 billion. Even mainstream figures like economist Larry Summerswonder whether the Fed’s hybrid public/private structure, which critics believe makes it beholden to financial interests, makes sense.
Progressive debates on central banking are not as advanced here as in Europe, where British Labour Party leader Jeremy Corbyn wants a “quantitative easing for people,” where the central bank injects money directly into the economy rather than filtering it through financial institutions. But Canova, who says his views were most influenced by an undergraduate economics professor who taught with one book—John Maynard Keynes’s General Theory of Employment, Interest and Money—bridges this gap. Twenty years ago this week, he wrote an op-ed for the New York Timesopposing the reappointment of Alan Greenspan as Fed chair because of his support for high real interest rates. If elected this fall, he would instantly become the strongest advocate in Congress for a people’s Fed.
While Debbie Wasserman Schultz has few known views on the Federal Reserve, Canova’s populism offers a strong counterweight to her corporate-tinged philosophy. And even before that contrast plays out, the hunger for any challenge to Wasserman Schultz is palpable.
“The money is coming in more rapidly than believable,” said Howie Klein, co-founder of Blue America PAC, which raises money for progressive Democrats. Wasserman Schultz has been on Klein’s radar since she, as chair of the “Red to Blue” campaign for electing House Democrats, refused to campaign against three Republicans in Florida because of prior friendships and their joint support for the state sugar industry.
Klein sent a Blue America fundraising email shortly after Canova’s announcement, and raised $7,000 within 12 hours, and over $10,000 at last count. The intensity of support reached beyond the PAC’s traditional donor base. “Our average donation is $45, but in this case we’re getting $3, $5,” Klein said. “For people who our donors have never heard of, it can take three-four months to do that. It’s just because ofDebbie Wasserman Schultz.”
Similarly, Canova says he’s seeing tens of thousands of visits to his website andFacebook page, suggesting support beyond south Florida. However, he wants to localize rather than nationalize the race. The district, initially drawn with Wasserman Schultz’s input when she served in the Florida state Senate, is now more Hispanic and less reliable for a politician who Canova believes has lost touch with her constituents.
“You talk to people at the Broward County Democratic clubs, they say she takes us for granted,” Canova said. The political model for his campaign is David Brat, another academic who took on a party leader—then-House Majority Leader Eric Cantor—and defeated him, on the grounds that Cantor ignored his district amid constant corporate fundraising.
If there’s one thing Wasserman Schultz can do, it’s raise money—that’s why she chairs the party. She will have a big cash advantage and the power of incumbency. But Canova thinks he can outmatch her by riding the populist tide. “There’s a tendency to get so down about the system, but this is an interesting moment we’re living in,” Canova said. “This is a grassroots movement. We’re tapping in without even trying yet.”
Source: The New Republic
In Service Sector, No Rest for the Working
New York Times - February 21, 2015, by Steven Greenhouse - On the nights when she has just...
New York Times - February 21, 2015, by Steven Greenhouse - On the nights when she has just seven hours between shifts at a Taco Bell in Tampa, Fla., Shetara Brown drops off her three young children with her mother. After work, she catches a bus to her apartment, takes a shower to wash off the grease and sleeps three and a half hours before getting back on the bus to return to her job.
At Hudson County Community College in Jersey City, Ramsey Montanez struggles to stay alert on the mornings that he returns to his security guard station at 7 a.m., after wrapping up a 16-hour double shift at 11 p.m. the night before.
And on many Friday nights, Jeremy Little waits tables at a Perkins Restaurant & Bakery near Minneapolis and doesn’t climb into bed until 3 a.m. He returns by 10 a.m. for the breakfast rush, and sometimes feels so weary that he forgets to take rolls to some tables or to tell the chef whether customers wanted their steak medium rare.
“It makes me feel really tired,” Mr. Little said. “My body just aches.”
Employees are literally losing sleep as restaurants, retailers and many other businesses shrink the intervals between shifts and rely on smaller, leaner staffs to shave costs. These scheduling practices can take a toll on employees who have to squeeze commuting, family duties and sleep into fewer hours between shifts. The growing practice of the same workers closing the doors at night and returning to open them in the morning even has its own name: “clopening.”
“It’s very difficult for people to work these schedules, especially if they have other responsibilities,” said Susan J. Lambert, an expert on work-life issues and a professor of organizational theory at the University of Chicago. “This particular form of scheduling — not enough rest time between shifts — is particularly harmful.”
The United States decades ago moved away from the standard 9-to-5 job as the manufacturing economy gave way to one dominated by the service sector. And as businesses strive to serve consumers better by staying open late or round the clock, they are demanding more flexibility from employees in scheduling their hours, often assigning them to ever-changing shifts.
Workers and labor advocates are increasingly protesting these scheduling practices, which often include giving workers as little as two days’ advance notice for their weekly work schedule. These concerns have gained traction and translated into legislative proposals in several states, with proponents enviously pointing to the standard adopted for workers in the 28-nation European Union. It establishes “a minimum daily rest period of 11 consecutive hours per 24-hour period.”
Britain, Germany and several other countries interpret that to require that workers be given at least 11 hours between shifts, although waivers are permitted. “If a retail shop closes at midnight, the night-shift employees are not allowed to start before 11 o’clock the next morning,” said Gerhard Bosch, a sociology professor and expert on labor practices at the University of Duisburg-Essen in Germany.
Continue reading the main story
In the United States, no such national or state labor law or regulation governs the intervals between shifts, except for some particular jobs like airline pilots, although some unions have negotiated a minimum time for workers to be off, sometimes eight, 10 or 12 hours.
But at the state level this year, bills have been introduced in Maryland and Massachusetts and will be introduced in Minnesota on Monday, each of them calling on employers to give workers at least 11 hours between shifts and three weeks’ advance notice for schedules. Those proposals would require businesses to pay some time and a half whenever employees are called in before 11 hours have passed between shifts.
Paul Thissen, the Democratic leader of the Minnesota House of Representatives, supports the legislation. “When it comes to scheduling, the playing field is tilted very dramatically in favor of the employer,” Mr. Thissen said. “What we’re proposing is just trying to rebalance the playing field.”
Anthony Newby, executive director at Neighborhoods Organizing for Change, a Minneapolis-based group that advocates for worker rights, among other issues, said that clopenings have become a big issue in his region. “Clopenings are hurting many of our members; many are in the restaurant field and some in construction and nursing,” he said. “We worry it has an effect on safety — workers feel they’re on autopilot. It also has a big impact on families, on mothers trying to manage a family and arrange child care.”
Ms. Brown, who works as a cashier at Taco Bell, said her children — ages 5, 4 and 2 — don’t like it when she has just seven hours between shifts. That usually means they hardly see her for two nights in a row; they sleep at their grandmother’s both nights. On the second night, after just three and a half hours’ sleep the previous day, Ms. Brown says she stops by her mother’s for an hour or two to see her children, and then heads home to sleep.
“My kids say, ‘Mommy, I miss you,’ ” she said. “I get so tired it’s hard to function. I feel so exhausted. I don’t want my kids suffering not seeing me. I try to push to go see them.”
Although Ms. Brown dislikes clopenings, she doesn’t turn them down because she needs as many hours as she can get. She makes $8.10 an hour and works about 25 hours a week.
Brandon Wagner, who works for a Zara apparel store in Manhattan, often works from 1 p.m. until 10:30 p.m. or 11 p.m., getting back to his apartment in Brooklyn around midnight. He often must be back at work at 8 the next morning, and as a result he sleeps just five hours.
“When you question this, they give a shrug of the shoulder,” Mr. Wagner said. “They say, ‘Everybody does this. You have to put up with it or go somewhere else.’ ”
Last summer, Starbucks announced that it would curb clopenings on the same day that The New York Times published an article profiling a barista, Jannette Navarro, mother of a 4-year-old, who worked a scheduled shift that ended at 11 p.m. and began a new shift at 4 a.m.
Continue reading the main story
Continue reading the main story
At the time, Cliff Burrows, Starbucks’s group president for the United States, said: “Partners should never be required to work an opening and a closing shift back-to-back. District managers must help store managers problem-solve issues specific to individual stores to make this happen.” (“Partners” is the term Starbucks uses for its employees.)
Neil Trautwein, a vice president with the National Retail Federation, acknowledged that some instances of scheduling were egregious, but he pointed to Starbucks’s voluntary response to argue that states should not enact any laws to address the issue.
“Advocates have it wrong to think you can legislate and just outlaw the process,” Mr. Trautwein said. “The market adjusts to the needs of workers.” He added that what Starbucks did “demonstrates that businesses listen to their employees and adjust.” (In response to complaints about schedules changing week to week, Walmart said on Thursday that it would give workers more predictable schedules.)
But several people who identified themselves as Starbucks employees complained on a Facebook private group page that they still were scheduled for clopenings, despite the company’s pronouncement. One worker in Texas wrote on Jan. 30, “I work every other Sunday as a closer, which is at 10:30 or really 11-ish, then scheduled at 6 a.m. the next morning.” Another worker in Southern California wrote, “As a matter of fact I clopen this weekend.”
Laurel Harper, a Starbucks spokeswoman, questioned the authenticity of the Facebook posts. She said company officials had held conversations nationwide “to make sure we are giving our partners the hours they want” and to prevent clopenings.
Some managers say there are workers who don’t mind clopenings — like students who have classes Monday through Friday and want to cram in a lot of weekend work hours to maximize their pay.
Tightly scheduled shifts seem to have become more common for a number of reasons. Many fast-food restaurants and other service businesses have high employee turnover, and as a result they are often left with only a few trusted workers who have the authority and experience to close at night and open in the morning. Professor Lambert said no studies had been done on the prevalence of clopenings nationwide.
Carrie Gleason, director of the fair workweek initiative at the Center for Popular Democracy, a liberal advocacy group, said one reason for the increasing prevalence of clopenings was that many companies had shifted scheduling responsibilities away from managers and to sophisticated software that she said was not programmed to prevent such short windows between shifts.
But David Ossip, chief executive of Ceridian, a human resources and payroll company, said that when his company provided scheduling software to companies, it generally recommended programming a mandated rest period. The software would then warn managers when an added shift violated that rest period.
“You would make sure you have a minimum rest period between shifts,” he said. “We would set up fairness results that call for regular working hours — not one day work at night, the next day work in the morning.” He added, “You have to be home for eight, 10 or 12 hours.”
Andy Iversen, a stocker at Linden Hills Co-op in Minneapolis, said the grocery store’s managers used to schedule him two or three times a week to work until 9 p.m., and then be back at 5 a.m.
“I was beyond exhausted,” he said, noting that he was getting to bed at midnight and waking around 3:45 a.m. At the time, he was pursuing a master’s degree and taking a course in neuroscience. “I couldn’t concentrate because I was so tired,” he said. “I had to drop out of class.”
Mr. Iversen praised his store’s managers for no longer giving him clopenings. Marshall Wright, the store’s produce manager, said, “We think it’s the right thing to do. We don’t feel people should work shifts like that.”
Mr. Iversen couldn’t agree more: “It doesn’t take that much empathy or reasoning to see that clopenings stink, and people don’t want to do it.”
Source
Will last-minute work soon be history?
When Russell Miller worked at Abercrombie, one of his days each week had to be an on-call day. He wouldn’t know if he’d have to show up to work until an hour in advance.
...
When Russell Miller worked at Abercrombie, one of his days each week had to be an on-call day. He wouldn’t know if he’d have to show up to work until an hour in advance.
“You had to block out that time period as if you were working,” he says. One store he worked at was 45 minutes from his house. “We had to be ready to be there on time. With all the regulations about what we wear, how we look and how we present ourselves, I had to get fully ready for my shift and ready to walk out the door at the time I made the phone call to find out if they were even going to need me or not.”
For Miller, this was more than an inconvenience.
“Having a second job wouldn’t work at a time when I was scheduled for an on-call shift. If they scheduled me for an on-call shift and they didn’t call me, that was real money lost and real time opportunity lost.”
On-call scheduling “means you have to put your life on hold,” says Rachel Laforest, director of the Retail Action Project, a division of the Retail Wholesale and Department Stores Union. “It becomes very difficult to lead full lives, so for example, if I’m a parent and I have to figure out arranging for child care, it’s impossible for me to do that” with such short notice, she says.
There isn’t good national data on the prevalence of on-call scheduling, but regional surveys suggest it’s widespread and not limited to retail, says Stephanie Luce, professor of labor studies at CUNY. “We see it in fast food, airlines, beauty services, domestic services, child care services," she says. "Smaller studies seem to suggest this practice really picked up after the recession, however, over the past couple of years, there’s been a real push back.”
After New York’s attorney general suggested Abercrombie and 12 other companies were potentially violating New York law through the practice, Abercrombie announced it would work to discontinue the practice.
The company responded on August fifth “...we understand – and share – the attorney general’s concerns about call-in shift scheduling. The attorney general’s letter helped focus our ongoing internal discussions about how to create a stable and predictable work environment as possible for our employees.”
Gap Inc. told Marketplace: “Each of our brands have made a commitment to evaluate their practices and determine where we may be able to improve scheduling stability for our employees, while continuing to drive productivity in stores.”
Gap also says it’s working on a pilot project with University of California, Hastings College of the Law “to examine workplace scheduling and productivity. Led by recognized expert professor Joan Williams, the goal of the Gap Hourly Scheduling Initiative is to use research and data to create solutions that will be sustainable and can be implemented across our company’s entire footprint and fleet."
Under pressure from a lawsuit, Victoria’s Secret discontinued on-call scheduling earlier this year.
To the extent firms are reconsidering the practice, the reasons are both technological and monetary.
On-call scheduling resulted from pressure to restrict the ratio of hours to sales and an attempt to more nimbly adapt to changes in demand, says University of Chicago associate professor Susan Lambert. It also results in companies “overhiring,” using many part time workers instead of fewer full time workers. But Lambert says “the costs of managing this way do not enter the balance sheets of firms.” Employees who work irregularly, for example, may not always be up to speed with the latest changes to the store or the layout, she says.
“From a very engineering standpoint,...[on-call scheduling] may look efficient but when you look on front lines of firms, you see all the opportunities costs there are in terms of people walking out because they can’t find something or can’t get help.”
Another factor is technology.
“New technologies give us now the ability to predict very well variations in demand,” Lambert says.
Companies don’t need to keep workers on hold; they can figure out pretty well whether they need to have someone show up to work far in advance of two hours before the shift starts, she says. Companies are so good at predicting demand that they tried to "overoptimize" down to the minute, keeping workers on call to cover even slight changes in demand.
“You don’t need to do that micro-management,” she says. “Retailers are learning that."
So it may be, she says, that workers and firms are finding on-call scheduling is a headache for everyone.
Here are the responses from the 13 companies the New York attorney general wrote warnings to:
Ann Inc.: "Staffing guidelines do not include the practice of on-call shifts."
Gap Inc.: "Each of our brands have made a commitment to evaluate their practices and determine where we may be able to improve scheduling stability for our employees, while continuing to drive productivity in stores. As part of our commitment to more sustainable scheduling practices, we are working on a pilot project with Gap Brand and UC Hastings College of Law to examine workplace scheduling and productivity."
J.C. Penney Co: "We do not utilize on-call scheduling, and JCPenney has always maintained a policy against the practice."
Sears Holdings Corp: "Sears Holdings does not use on-call scheduling for store associates. That said, we will fully cooperate with the New York Attorney General’s office’s requests."
Target Corp: "Target does not use on-call scheduling."
TJX Cos: "We don’t use on-call shifts at TJX and it hasn’t been our practice, i.e. nothing new since April."
Williams-Sonoma Inc: "We actually discontinued [on-call scheduling] for the entire country."
Burlington Stores Inc., Crocs Inc., J. Crew Group Inc. and Urban Outfitters Inc. did not return requests for comment.
Source: Marketplace
1 day ago
3 days ago