CPD IN THE NEWS

WASHINGTON — One of the longest economic expansions in American history remains so fragile that the Federal Reserve said on Thursday it would postpone any retreat from its stimulus campaign.

Janet L. Yellen, the Fed’s chairwoman, described the decision as a close call and said the central bank still expected to raise interest rates later this year. The Fed has kept its benchmark interest rate close to zero since late 2008, when the nation’s economy was at the depths of crisis.

“The recovery from the Great Recession has advanced sufficiently far and domestic spending has been sufficiently robust that an argument can be made for a rise in interest rates at this time,” Ms. Yellen said at a news conference.

But, she said, “heightened uncertainties abroad,” including the Chinese economy’s weakness, had persuaded the bank to wait at least a few more weeks for fresh data that might “bolster its confidence” in continued growth.

The Fed’s decision, announced after a two-day meeting of its policy-making committee, had been widely expected by investors in recent weeks.

Fed officials spent most of the summer suggesting that they wanted to raise rates in September, only to lose confidence as signs of slowing global growth weighed on markets.

The 10-year Treasury note yield fell 0.11 percentage points to 2.189 percent. The Standard & Poor’s 500-stock index dropped 0.26 percent to 1,990.20.

There were signs, however, that the Fed might hesitate only briefly. It separately released economic projections showing 13 of the 17 officials on the Federal Open Market Committee still expected to raise the benchmark rate this year.

The Fed has said it is moving toward raising rates because it expects economic growth to continue, reducing unemployment and eventually raising inflation; on Thursday, Ms. Yellen said that outlook had not changed.

“There’s a tendency among some to think that they’re always going to get cold feet, and I thought Yellen really as much as possible discouraged that kind of thinking,” said John L. Bellows, a portfolio manager at Western Asset Management.

The policy-making committee still has scheduled meetings in October and December, and Ms. Yellen said a rate increase was possible at either meeting.

One official, Jeffrey M. Lacker, president of the Federal Reserve Bank of Richmond, in Virginia, voted to raise rates at the September meeting, the first dissent this year. The economic projections suggest that Ms. Yellen faces more disagreements at the Fed’s October meeting, given that six officials predicted the Fed would raise rates at least two times this year, while four said that they expected no increases.

The latest postponement was welcomed by liberal activists and economists who argue that the recovery remains incomplete. Representative John Conyers Jr., Democrat of Michigan, introduced legislation on Thursday directing the Fed to push the unemployment rate below 4 percent. While the bill has no chance of winning approval in the Republican-controlled Congress, Mr. Conyers addressed a rally organized by the Center for Popular Democracy outside an office building where Ms. Yellen spoke, joining in a chant of “Don’t raise interest rates.”

Critics expressed concern that the Fed has adopted increasingly ambitious goals for its stimulus campaign. “There is always a reason to chicken out,” said Dean Croushore, a professor of economics at the University of Richmond. “The Fed will lose credibility over time, as it fails to follow its own prior announcements about when it will increase rates.”

Ms. Yellen, asked about the efforts to put public pressure on the Fed, which have mounted in recent months, dryly observed, “We have been receiving advice from a large number of economists and interested groups.”

She denied that outside pressure had influenced the Fed’s decision. She also said it had not been influenced by concerns about a potential government shutdown, which could disrupt growth, though she said that it “would be more than unfortunate.”

The Fed’s decision is probably a “mixed blessing” for the global economy,” Eswar S. Prasad, an economics professor at Cornell, said in an email. Instead of new pressures, investors must deal with continued uncertainty.

A Fed increase, for example, might have prompted investors to pull money out of countries like Turkey or Brazil, damaging their economies, and reduced demand for imports from Europe and other developed countries. But the decision to stand pat also could weigh on Europe in the short term if it causes the euro to rise against the dollar, making things harder for exporters.

The American economy is outpacing the rest of the world, and Ms. Yellen said on Thursday that the Fed did not yet see evidence that growth was slowing.

Fed officials say they believe that labor market conditions have nearly returned to normal. In the new round of economic projections, officials estimated unemployment would stabilize next year at 4.8 percent, just below the August level of 5.1 percent.

Officials also remain confident that inflation will rebound, although perhaps a little slowly because of the recent downturn in the prices of oil and other commodities. Since the financial crisis, inflation has remained consistently below the central bank’s 2 percent annual target, lately rising just 0.3 percent over the previous year.

Fed officials argue that a tighter labor market will lead to higher inflation as employers are finally prodded to pay higher wages. But, Ms. Yellen said on Thursday, that will happen more slowly than the unemployment rate might suggest, because people not counted among the unemployed — like those who have stopped looking for work or have taken part-time jobs — may start looking again as conditions improve.

James A. Wilcox, an economist at the University of California, Berkeley, said that it was difficult to find evidence for a strong connection between inflation and employment, particularly over the last decade. Inflation fell less than expected during the recession, and it has increased less than expected in the aftermath.

“The events of the last 10 years have caused a lot of rethinking and stomach acid within the Federal Reserve and the research community,” Dr. Wilcox said.

Recent history has reinforced the more basic point that it takes a lot to change the underlying pace of inflation. That stability has allowed the Fed to press its stimulus campaign, but Dr. Wilcox said it also provided a good reason for the Fed to be wary of allowing inflation to climb, because reversing the trend could be very painful.

“If the heat builds slowly, and it can only be turned down slowly, then you have to move ahead of time,” he said. “That’s why there’s sympathy for the idea of starting to raise rates relatively soon.”

Given the weakness of economic growth, however, Ms. Yellen reiterated on Thursday that the Fed planned to raise rates more slowly than its past practice. Fed officials expect the benchmark rate to reach 2.6 percent by the end of 2017.

In June, they predicted the rate would reach 2.9 percent. Officials also expect the rate to reach a new plateau of about 3.5 percent, less than the June prediction of 3.8 percent and significantly below the level once regarded as normal. Such a low plateau would limit the Fed’s ability to respond to economic downturns.

The Fed has already held its benchmark rate near zero much longer than it once expected. It announced in 2012 that it would keep rates near zero at least until the unemployment rate fell below 6.5 percent. That threshold was crossed in April 2014.

Last winter, when the Fed ended its bond-buying campaign, officials pointed to June as the most likely moment for “liftoff” from the so-called zero bound.

Some officials have made clear they are not inclined to wait much longer.

Stanley Fischer, vice chairman of the Federal Reserve, warned in late August that officials would not be able to postpone a decision until all doubts were resolved. “When the case is overwhelming,” he said, “if you wait that long, then you’ve waited too long.”

Ms. Yellen echoed that warning on Thursday. “We don’t want to wait until we’ve fully met both of our objectives to tighten monetary policy,” she said.

The Fed’s hesitation on Thursday echoed events of two years ago, when investors expected the central bank to announce at its September 2013 meeting that it was tapering its bond purchases. The Fed demurred, citing uncertainty about economic conditions.

Instead of September, it acted in December.

Source: New York Times

In These Times - March 12, 2014, by Michelle Chen - New York City’s tens of thousands of construction workers face a precarious landscape at work.  Teetering at the edge of rooftops, sidestepping mammoth cranes and noisy bulldozers, and navigating through half-collapsed walls and chemical-laden debris, they’re surrounded by hazards day in and day out. Yet many workers remain silent about unsafe conditions. For them, the risk of retaliation outweighs the risk to life and limb.

Given these hazards, one might assume that demanding employers take responsibility for worker safety is about as basic a precautionary measure as a hard hat. Yet, construction industry lobbyists are working hard to gut the Scaffold Law, a keystone piece of occupational safety legislation that has for more than a century added an extra layer of accountability for firms that fail to protect workers from harm. Complaining that the law cuts into their bottom line, opponents have in recent months pushed for reform legislation in Albany that could prove disastrous for the workers most at risk: non-union Asian and Latino workers doing small-scale and informal building jobs already off the regulatory radar of the federal Occupational Safety and Health Administration (OSHA).

The Scaffold Law, a state law on the books since 1885, states that worksites above the ground “shall be constructed, placed and operated as to give proper protection to a person so employed.” The law holds owners and contractors liable for injuries that result as a violation of those standards, and allows employees to sue for damages if they can demonstrate that such a violation occurred and caused the injury in question. Advocates say that the law thereby promotes safety standards such as provision of appropriate training and protective equipment, as well as checks to ensure that worksites are structurally sound.

Opponents say New York’s law is a frivolous measure unique to a notoriously litigious city. But in reality, lawmakers passed the Scaffold Law in response to alarming reports of injuries and deaths caused by unsafe conditions at building sites, including faulty scaffolds. And in fact, other states have passed similar safety laws over the years.

Illinois’ occupational safety record worsened after the state repealed the law in 1995. According to one analysis by a trial lawyers' group, “In 2004, the incidence rate of falls from scaffolding/staging in the construction industry in Illinois was more than triple the national rate.”

The firms and business groups, including the Associated Builders and Contractors, American Insurance Association and, in a nod to diversity, Association of Minority Enterprises NY, mobilizing against the law blame it for excessive litigation and insurance costs, saying that it puts undue emphasis on the employer rather than the “personal responsibility” of the worker. They say the law should be rewritten to allow for consideration of “comparative negligence,” to take into account workers’ alleged carelessness. Proposed changes to the law would explicitly direct juries to consider the degree to which the worker caused the accident. The idea is to create more legal wriggle room to limit the company's legal and financial liability toward victims.

Critics point out that under the current law, the courts are already tasked with adjudicating these factors in civil suits when determining whether the employer is legally at fault for a safety failure, since the law addresses only proven violations of safety codes. But more importantly, critics argue that the concept of “comparative” responsibility is absurd in light of the outsized power imbalance between construction workers and bosses.

Of course, the Scaffold Law provides just a thin layer of protection against an endemically oppressive labor market.

But the Center for Popular Democracy (CPD), a New York City-based advocacy group, argues that the Scaffold Law helps “protect workers from dangers at work that lead to disparate outcomes based on race, ethnicity, or language.”

Occupational hazards, as well as labor abuse, are rife across the construction industry, particularly for more casual, unregulated work, such as the day laborer jobs that proliferated in the aftermath of Superstorm Sandy and the small-scale contractor projects on private suburban homes. Falls from heights made up over one-third of construction worker deaths in 2012, and construction workers suffer injuries that are more frequent and severe than workers in many other private-sector industries, according to data from the Bureau of Labor Statistics. According to an analysis by CPD, in New York City between 2003 and 2011, a stunning 74 percent of fatal construction-site falls investigated by OSHA involved Latino or immigrant workers, exceeding their representation in the general population and the construction workforce. Most occurred on smaller, non-union worksites, where undocumented labor is typically concentrated.

Other research from advocacy groups and occupational-safety authorities suggests Latino immigrant workers are deterred from speaking out about unsafe conditions, in part due to limited English ability or fear of exposing their immigration status. That compounds the oppression of economic precarity and discrimination; it’s hard to feel empowered to challenge your working conditions when you’re “off the books.”

CPD’s analysis highlights the perilous tightrope these workers traverse each day. In one case narrative in the report, two men were working at a height of 16 feet, and “They were moving and adjusting the scaffold when employee #1 fell. Employee #1 was not tied off to his lifeline. Employee #1 was pronounced dead at the hospital.”

Those who survive such workplace accidents may never fully heal. In an interview with WNYC last year, Pedro Corchado recalled an accident while working on a ladder in the Bronx in 2008. “The ladder collapsed on me,” he said. “I fell about 11 feet or so to the concrete floor. I suffered neck and lower back injuries that will be with me the rest of my life.”

Under the proposed reform, these workers might come under scrutiny for being “negligent”—Why did he get on a shaky ladder in the first place? Why wasn’t his lifeline securely tied? Advocates counter that question’s about the employer’s negligence—Who was charged with overseeing the worksite? Did inadequate equipment or poor management place workers in harm’s way?— ultimately hold more weight.

“The fact of the matter is, you could be doing everything right,” CPD Director of Strategic Research Connie Raza tells Working in These Times. “If you don't have the right equipment, you're not going to be able to keep yourself safe in every circumstance that comes up. And it is the owners' and the contractors' responsibility to make as safe a workplace as possible, but certainly as safe a workplace as legally required."

As for the business case against the law's cost, it is true that some of this uniquely litigious city’s largest civil settlements in recent years came from suits involving construction-related scaffold and ladder injuries.

But this is offset by the permissiveness of the federal regulatory environment. According to the AFL-CIO, the average penalty assessed for a “serious” violation of an OSHA standard, such as failing to provide appropriate mechanical safeguards or protective gear—in New York in 2012 was $2,164. (Criminal prosecutions are virtually unheard of, and the agency's inspection and enforcement capacity is severely hampered by chronic understaffing).

While the contractors at the top of the construction industry complain of lawsuits and insurance costs, Razza says the suggested reforms “would shift responsibility away from owners and contractors who control the work site, to workers who don't, and who are often really in a relationship where they feel threatened if they come forward with complaints ... The construction and insurance industries are trying to push back and save money, and the reason that the law is so important is that it saves lives."

Source

"We’re stronger together. And right now, more than ever, we need our elected officials to be looking at how we expand the safety net, how we provide more opportunities and more stability to communities across the country, not less,” said Jennifer Epps-Addison, a co-executive director of the Center for Popular Democracy Action, a progressive umbrella group organizing the event with the help of local partners.

Read the full article here.

After a contentious afternoon in which the Democratic National Convention's Rules Committee voted down a series of proposals from the Sanders delegation to reform the most glaring anti-democratic features of the party's primary and caucus process, negotiators met in secret for several hours and forged an agreement to create a reform commission to change those rules for future elections.

"Let me call us America's party," said Texas Congresswomen Sheila Jackson, who rose to support the proposal after opposing the Sanders camp's amendments only hours before. "And America's party, the Democratic Party, links arms with our brothers and sisters from Senator Sanders, and the journey that they made and their supporters, and the journey that was made by Hillary Rodham Clinton's supporters.

"But most of all what I want to say is that divide is no more," she continued. "That we will climb this journey of victory together. That our arms will be linked and we will go to the floor of this great convention. And I am here to say thank you for being who you are. For I see that mountain that we have been challenged to cover, and I am going to say, we shall overcome and elect the next president of the United States, Hillary Rodham Clinton, together... together... together."

The reform commission, which was then approved with 158 yeses, 6 nos and 1 abstention, will look at the main grievances raised by Sanders during the 2016 nominating season: that state party-run caucuses were non-democratic in their counting and allocation of delegates to the next stages in the process, and will, according to Sanders delegates who negotiated, shrink by two-thirds the number of so-called superdelegates, or the party insiders who comprise one-sixth of the 2016 national convention delegates.

"I rise in support of this measure because this is the result of reasoned discussions by many leaders within both campaigns, but it is truly driven by an activism, an activism within the Democratic Party that has been embraced, that has been engaged, and that we should continue to promote," said Paul Feeney, a Sanders delegate who headed his campaign in Massachusetts and Connecticut. "It's no coincidence that so many amendments have been filed today about superdelegates. The supporters of Bernie Sanders have risen up across this country. Acted up. Not to demand a new party, but to make the Democratic Party even better. That's what we're doing with this amendment. That's what we are doing with this revolution that is also an evolution."

The turnaround came after a frustrating afternoon for Sanders delegates, when it seemed the convention's rules committee was parting ways from the party's platform committee by thwarting their call for democratic reforms. The Sanders campaign won 13 million votes, 1,900 delegates and broke the party's fundraising records for the number of small donors, the delegates told the room, in part to push for concessions on the reforms they sought.

But before panel chair Barney Frank called a recess after 4pm, the convention Rules Committee repeatedly rejected a series of reforms to their “superdelegate” system, despite the pleas of Sanders delegates who urged the 165-member body to accommodate millions of voters who want a more open and less rigged presidential nominating process.

Superdelegates are top elected federal and state officials, state party leaders and key allies like labor union executives who can cast a vote for the presidential nominee and also sit on a range of convention committees, from drafting the platform to rules. For months, Sanders and his supporters have complained that the system gave Clinton an unfair lead as hundreds of party officials sided with her before states even started voting, which tilted the media coverage despite Sanders rallies drawing many thousands.

His delegates were hoping to convince the party to change that system, as well as reform the caucus process and adopt more open primaries, in which any voter, not just registered Democrats could participate. But several hours into hearings on Saturday seemed to signal that a majority of the rules panel were not willing to shake up the party’s status quo.

Before they broke to negotiate and propose the commission, the panel heard short debate and then voted down a handful of reforms, from eliminating the system of superdelegates in its entirety to reducing their numbers and limiting their voting.     

“I am asking those of you from the Clinton camp to take heed,” said Julie Hurwitz, a Sanders delegate from Detroit, speaking in favor of a compromise that would have let superdelegates vote if there was no clear nominee on the first convention ballot. “I would ask you to not just blindly vote no, no, no… The stakes are so high that I plead for you to take this issue seriously.”

“We have had these rules in place for 30 or 40 years,” said George Albro, a Sanders delegate from New York, responding to those who said now was not the time to act. “We’ve had a lot of time to study it. We don’t have a lot of time to change it. If we walk out of this room with our heads hanging low… The only standard that we are holding the DNC to is the standard of democracy.”

But a series of amendments were repeatedly rejected by two-to-one margins, especially after longtime officeholders said the superdelegate system never swayed a presidential nomination by ignoring the popular vote.

“This is more non-democratic,” said Jackson Lee in response to a proposal cutting the number of superdelegates. “The [origin of] superdelegates was a healing process, when the party was fractured… It was not to divide us, it was not to be an elite process.”

She argued that superdelegates allowed the party to elevate many people of color and those from rural areas. However, that explanation, while swaying a majority of Rules Committee members, was not persuasive to Sanders delegates. They told the room the party must send a signal to the millions drawn to their campaign that their call for a more open process was heard.

“This is the correct forum to have this discussion,” said North Carolina’s Chris O’Hara. “With all due respect… if superdelegates were put in place to heal a divided party, we are a divided party… I beseech you to actually listen.”

“The Republicans have basically nominated a fascist. It’s close. Please take a critical look at this,” said Delaware’s Rebecca Powers.

“I think this is the time for this,” said Miami’s Bruce Jacobs. “You are sending a message to all the people coming into the party.”   The Rules Committee compromise came after heavy pressure from Democratic-leaning organizations, which gathered more than 750,000 signatures calling for change, flew a plane over Philadelphia Friday calling for an end to superdelegates, and sent thousands of tweets to rules committee members. There was high interest in the votes, and shouts of “shame, shame, shame” from outside the committee room could be heard on a live Youtube stream of the meeting.

The groups that urged the DNC to end superdelegates include Courage Campaign, Credo, Daily Kos, Demand Progress/Rootstrikers, Democracy for America, Center for Popular, Democracy, MoveOn, National Nurses United, New Democrat Network, the Other 98%, Presente, Progressive Change Campaign Committee, Progressive Democrats of America, Progressive Kick, Reform the DNC, and Social Security Works.

Editor's note: Another reform proposal, to push the party to open its primaries to all registered voters, not just Democrats, was rejected on Saturday evening. Today Open Primaries, a non-profit electoral reform organization, brought 40,000 signed petitions to the meeting, a release noted. “It was an honor to stand up for the 26.3 million registered voters who couldn’t vote in this presidential election," Maggie Wunderly, a Rules Committee member from Illinois said in the release.

By STEVEN ROSENFELD 

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