Sunday, September 07, 2014

One-third of American workforce working freelance

I found this Reason Magazine story through the Washington Monthly, with the final source coming from this report Freelancing in America.  Starting with Reason Magazine:
A new report shows some 53 million Americans—or 34 percent of the U.S. workforce—are now working as freelancers in some capacity. "This is more than an economic change," asserts the report, a joint effort from the Freelancer's Union and freelance markeplaces oDesk and eLance. It's also "a cultural and social shift" that will "have major impacts on how Americans conceive of and organize their lives, their communities, and their economic power."
The first and last time anyone looked at the freelance worker population in the U.S. was 2004, in a report from the Government Accountability Office (GAO). Back then the GAO turned up about 42 million "contingent workers," a group that included folks we would normally think of as freelancers but also all part-time workers. "It was a solid, if not particularly nuanced, effort," as the writers of the new report put it.
The Freelancing in America report defined freelancers at "individuals who have engaged in supplemental, temporary, or project-or-contract-based work in the past 12 months," while breaking this group into five categories:
  • Independent Contractors (21 million). Individuals whose work involves a project-to-project basis in the field.  They make up around 40 percent of freelancers.
  • Moonlighters (14.3 million).  Individuals who work a regular full-time job, and do some freelance work on the side.  They make up 27 percent of freelancers.
  • Diversified workers (9.3 million).  Individuals who pull income from multiple sources, including traditional employment and freelance work.  They make up around 18 percent of freelancers.
  • Temp workers (5.5 million).  These individuals work with a single employers, client, job, or project, but on a temporary basis. They may be a temp agency workers, and make up around 10 percent of freelancers.
  • Freelance business owners (2.8 million).  These individuals employ between one and five employees, and who consider themselves both freelancers and business owners.  They make up around 5 percent of the freelance workforce.
Reading through the report, I get the impression that the new freelance workforce will have a rosy-cheek future of deciding what multiple, high-paying jobs they can choose from, to fit their own freedom of schedule, creativity, while not having the stress of being controlled by a corporation or someone else, generating a positive impact in this new work and employment.

However, Dave Atkins at the Washington Monthly, sees differently:
Libertarians, of course, tend to get excited about this trend, seeing it as a pure form of free interactive capitalism in line with the much-ballyhooed “sharing economy.”
However, as a proud freelancer myself for over a decade (I fall into the “freelance business owner” category), I can attest that it’s not really a workable model for society. As with all things in unregulated libertarian capitalism, opportunity potential is high but the downside risk is enormous. It’s often difficult to make long-term plans since you aren’t sure if the freelance work is going to keep coming—and the nature of freelance work itself means that it’s hard to even plan a weekend getaway, much less a vacation, because if there’s a project required to happen at a certain time you can’t pass up the opportunity to take it on.
Beyond that, however, not everyone has the personality to deal with the level of uncertainty involved in freelancing. Most people like to know what they can count on, and don’t want to be forced to constantly be doing business development and singing for their supper every night. Also, a freelance economy reduces the necessary commitment of employers to their employees, whom they can increasingly treat as contractors to be discarded at the earliest convenience.
I can agree with David here, having been a "Freelance business owner" / "Independent contractor" for almost nine years.  Once I got out of the desktop publishing and printing industry in 2005, I've been pretty much making a small living as a defined temp workers and independent contractor for a number of low paying, temporary positions, before I was finally forced to accept that I will be in this freelancing position forever.  Since then, I've adapted to become a Freelance business owner / independent contractor for computer and technology work.  You really do have to hustle around and  sing for your supper.  You do not know how long the freelance work will last, or even how long the downtime will be between two projects.  You do not have the long-term weekly paycheck of a permanent position, where you can plan and budget your expenses.  Instead, you have to count your pennies and save for the basic living costs--again during the downtime between your projects.  Even worst, it that you may not even know when projects will come up and what their pay rates could be.  You may accept a lower paying project first--just as a means to pay the bills.  Two days later, a better, higher-paying project may come along.  What do you do?  Dump the first project to accept the second project?  Of course, there are also the endless paperwork and juggling between W-2 contract work, 1099 contract work, and recording business expenses to reduce your tax burden.  It is a lot easier to go into a permanent 9-5 job for a company.

Unfortunately, companies do not see it that way.  This is especially true in the tech sector of Silicon Valley here.  The two technology companies that I've done computer work for this year have outsourced their entire IT departments to independent contractors for staffing firms.  A couple of these technology contractors were working for the same company in the same job for both five years, and 10 years--but they were independent contractors, rather than regular employees.  There were even software designers and programmers that were hired as independent contractors, rather than regular employees.  The second company that I've done computer work for has outsourced not just their IT Department, but also the Help Desk and customer support workers.  Of course, company cafeterias are outsourced to catering companies, who hire their own contractors to work in the said company cafeterias.  Even when I was working in the desktop publishing industry, the printing company did not hire their own permanent employees to perform local delivery services, but instead hired contractors from staffing firms.

Then there are the folks standing outside the Home Depots?  What are they classified as in this freelance economy?

It is pretty much an easy guess as to why companies are ditching permanent employees for contractors and staffing firms of this freelance economy.  When you hire on a permanent employee, you not only have to pay that employee and hourly wage or salary, but also overtime wages, health insurance, Social Security, 401K retirement matching, vacation time, and other benefits.  Regular employees have got it made.  I started working at an estate sale company on a W-2 basis for a couple of months, before the estate sale company changed me over to an independent contractor position.  Why?  So the estate sale company would not have to pay for my health insurance.  You don't get these type of benefits as an independent contractor.  Companies are now cutting back on full-time employees' hours to part time hours as a means to avoid paying for health insurance and benefits to their former full time employees.  You can bet this type of cutback suppresses employee wages even more, generating more profits to the company.  The worry I have here is that as more Americans are seeing their paychecks stagnate, or are pushed into this freelance economy of uncertainty, how will this labor and wage shift affect their own spending patterns?  Are they willing to go out and buy a new house, car, or big ticket items, if they don't know whether they will have a new project job next week....or next month?  Are they willing to buy even more of the goods and services that companies are trying to sell them, even as these same companies are suppressing their wages?

Monday, September 01, 2014

More companies engaged in employee wage theft

I found this New York Times story via the Huffington Post.  Appropriate for Labor Day:
MIRA LOMA, Calif. — Week after week, Guadalupe Rangel worked seven days straight, sometimes 11 hours a day, unloading dining room sets, trampolines, television stands and other imports from Asia that would soon be shipped to Walmart stores.

Even though he often clocked 70 hours a week at the Schneider warehouse here, he was never paid time-and-a-half overtime, he said. And now, having joined a lawsuit involving hundreds of warehouse workers, Mr. Rangel stands to receive more than $20,000 in back pay as part of a recent $21 million legal settlement with Schneider, a national trucking company.

“Sometimes I’d work 60, even 90 days in a row,” said Mr. Rangel, a soft-spoken immigrant from Mexico. “They never paid overtime.”
The lawsuit is part of a flood of recent cases — brought in California and across the nation — that accuse employers of violating minimum wage and overtime laws, erasing work hours and wrongfully taking employees’ tips. Worker advocates call these practices “wage theft,” insisting it has become far too prevalent.

Some federal and state officials agree. They assert that more companies are violating wage laws than ever before, pointing to the record number of enforcement actions they have pursued. They complain that more employers — perhaps motivated by fierce competition or a desire for higher profits — are flouting wage laws.

Many business groups counter that government officials have drummed up a flurry of wage enforcement actions, largely to score points with union allies. If anything, employers have become more scrupulous in complying with wage laws, the groups say, in response to the much publicized lawsuits about so-called off-the-clock work that were filed against Walmart and other large companies a decade ago.

Here in California, a federal appeals court ruled last week that FedEx had in effect committed wage theft by insisting that its drivers were independent contractors rather than employees. FedEx orders many drivers to work 10 hours a day, but does not pay them overtime, which is required only for employees. FedEx said it planned to appeal.

Julie Su, the state labor commissioner, recently ordered a janitorial company in Fremont to pay $332,675 in back pay and penalties to 41 workers who cleaned 17 supermarkets. She found that the company forced employees to sign blank time sheets, which it then used to record inaccurate, minimal hours of work.
David Weil, the director of the federal Labor Department’s wage and hour division, says wage theft is surging because of underlying changes in the nation’s business structure. The increased use of franchise operators, subcontractors and temp agencies leads to more employers being squeezed on costs and more cutting corners, he said. A result, he added, is that the companies on top can deny any knowledge of wage violations.

“We have a change in the structure of work that is then compounded by a falling level of what is viewed as acceptable in the workplace in terms of how you treat people and how you regard the law,” Mr. Weil said.
There certainly is a change in the structure of work in America.  Where once, American companies would hire their own employees to perform company work and pay them wages and benefits, these same companies are now hiring independent contractors to do the same work for less pay, and are able to avoid paying health care costs and benefits.  Case in point--I worked as a subcontractor for a temporary staffing company, which was hired by a big Silicon Valley technology firm to replace computers.  This temporary staffing company paid a lower wage for the job, paid no benefits, and refused to pay over 8 hours per day, or any overtime--although the company did offer "comp time."  The question I would ask here is how many independent contractors even fully understand comp time--especially if the staffing company does not fully explain such compensation before contractor signs the contract?  And if the contractor doesn't understand the comp time and does not take it, well the staffing company just made extra money with free labor.

 The labor laws here have been diluted, weakened, and changed to the benefit of big companies--enticing them to commit such wage theft.  You have the long-term shifting of American workers from W-2 employees to 1099 contractors, the change from overtime pay to comp time, and the relentless suppression of wages.  The staffing company that I worked for replacing computers had a large number of contractors performing computer replacements, help desk support, and customer service.  I know that the Silicon Valley technology company contracts out for running their employee cafeterias and food service, security services, facilities maintenance, and possibly programming work.  Does any company hire their own employees anymore--aside from the CEO and Board of Directors?A previous Silicon Valley company that I contracted for did hire independent contractors to perform programming work.  It is all about endless cost cutting, with employee wages and compensation being a huge factor for companies bottom line--never mind about the employees' moral and benefit.  Both the big Silicon Valley firms and even small start-up businesses have done this--and I've worked in both as a contractor.  This is a trend I've been watching over the last ten years, but have not fully understood it until now.  The American worker is no longer and employee, but a small business contractor who now has to work for himself or herself.  That contractor is forced to negotiate with larger firms and staffing companies that hold all the cards and have all the resources to either offer jobs on their terms.  Here is a temp contractor job offer that requires a bachelors degree, five years experience, with specialized software training, that pays $10 per hour--and you'll be performing the work and responsibilities of what was three full-time positions that were cut last year!   Don't like that the job pays 10-20 percent less than the market rate?  There are ten more workers willing to take that job at that lower pay.  Of course, I haven't gotten into the unpaid intern positions with duties and responsibilities that should be paid positions! Have a complaint against working conditions?  You get fired and ostracized by that company--probably all the companies.  Government budget cuts on Labor Department investigations of wage thefts mean that companies can engage is such wage thefts against their own employees and contractors, and pretty much get away with it.  If such companies are caught, they get a slap on the wrist of paying for back wages--the managers and decision makers who agreed to conduct such wage theft are never thrown in jail!

The sad thing about this endless company cost-cutting, suppression of wages, transfer of employees to independent contractors, and endemic wage theft is that companies are slitting their own throats.  Because it is the employees that are also the consumers for whom these same companies need to sell their products and services.  We have had thirty years of supply-sided economic policies crammed down the American people, with stagnating wages and huge corporate profits being posted.  Are American consumers buying more products and services now?  Am I rushing out to buy more cars, clothes, appliances, and stuff on a stagnated wage that I used to be making 20 years ago--not counting for inflation?  I'm trying to avoid buying things.  We have a lack of demand in this country within the poor, working, and middle class because wages have been suppressed--companies are happy to sell luxury goods to the extreme rich and ubber-rich, who have all the money.  How long will this last?  How long will it be before nobody has any money to buy anything, and the ubber-rich have all the luxury goods they will ever want to buy?  How long will we, as workers and independent contractors, be told by the corporate-paid PR and media firms be endlessly told that we are the company's most valued asset, but then be screwed by the same companies through wage thefts, cost-cutting efforts, and forced to perform work of three jobs for a single minimum wage pay, coming from dysfunctional, narcissistic, and incompetent managers? 

How much longer will this last before everything comes crashing down?


Sunday, August 31, 2014

The New York very rich are angry at the ubber-rich's helicopter noise pollution

This is so ironic. I found this New York Times article through Daily Kos:
On an evening during the last stretch of summer, 385 people arrived at the studios of LTV, a cable-access programmer in Wainscott, on the East End of Long Island, for a town-hall meeting to discuss mounting aural assaults from commuter helicopters going to and from Manhattan. The issue had been igniting tempers all season — especially in the communities of Shelter Island, the Springs and parts of the North Fork, areas where a lot of the noise has been absorbed and where local self-perception runs less toward the glossy and indulgent than it does elsewhere on the East End.
"In 2007 we banned helicopters," Jim Dougherty, Shelter Island’s town supervisor, told me, pointing out that none of his constituents ever complained about the prohibition. "So it is the height of irony that we should become the dustbin for the East Hampton airport."
Helicopter traffic at the airport this summer has increased by close to 40 percent over last and with it has come a comparable rise in tension between the very affluent and the exceptionally rich.
"Quality of life truly is being diminished for commercial greed and the convenience of the same people who burned the economy," a longtime Shelter Island summer resident said to me.
"When I look up at small planes and choppers I see a fleet of middle fingers across the sky."
So what we have here now are the very rich getting angry at the ubber-rich flying their helicopters low over their exclusive neighborhoods during the commute hours. Of course, the ubber-rich have the money to purchase and fly their commuter helicopters, while the very rich are stuck driving their Range Rover SUVs and Beemers in rush-hour commuter traffic. Or the very rich have to listen to all these ubber-rich helicopters flying back-and-forth in their exclusive, gated communities at all hours of the day, drowning out the natural serenity of wild bird songs and crickets chirping. Do the ubber-rich care about the noise pollution they are causing? Probably not. But what is important here to realize is that this is an other symptom of the extreme inequality that exists in the U.S. between the 'haves' and 'have-nots,'but also the disconnect between the ubber-rich 'One Percenters,' and and everyone else--including those very rich individuals who provide the tax services, legal advice, financial advising, day-to-day company management, and a host of other professional services that have made these One Percenters' so ubber-rich that they could afford to commute by helicopter. I get the impression of the very rich people working hard and following the rules that were laid down by the ubber-rich for getting ahead that, one day, they could become part of that One Percent Club. Only now, the One Percent Club have snubbed their noses to the very rich, ignoring any sense of common courtesy, respect, decency and manners to them--just as they have done to the poor, working and middle classes. When you are so insulated with such extremely lavish wealth and power, are you ever going to see a growing, resenting backlash from the rest of the 99 percent that you have insulted and ignored?
At the turn of the last century it was the bourgeoisie in New York and other major cities who might have envisioned similar gestures of contempt directed at them by robber barons fleeing to Saratoga and Newport during July and August via the era’s own elaborate and expensive means of transport, private rail cars or yachts.
Richard Hofstadter, in his classic work of historical analysis "The Age of Reform," published in 1955, argued that it was the disgust and disruption felt by those who had previously occupied the highest ranks of the social order toward the new superseding class of self-lavishing bankers and industrialists that ultimately allowed the Progressive movement to flourish. The undermining of status radicalized the formerly complacent, and class politics took shape because one segment of the population had so much money that the merely respectable could now identify with the actually poor.

"To face the insolence of the local boss or traction magnate in a town where one’s family had long been prominent was galling enough,” Hofstadter wrote, “it was still harder to bear at a time when every fortune, every career, every reputation, seemed smaller and less significant because it was measured against the Vanderbilts, Harrimans, Goulds, Carnegies, Rockefellers and Morgans." A survey of Progressive Party leaders in 1912, he noted, revealed how overwhelmingly urban and middle-class they were. None were farmers and only one came from labor.
Makes me wonder, are we heading towards another Progressive revolt against the One Percent? Update: Looks like the ubber-rich are building monster McMansions in the Bel-Air hills over the more "modest" very rich homes.

Sunday, August 24, 2014

Two stories on net worth loss by the poor, and minimum wage loss from inflation

I found a couple of stories that I wanted to comment on.  The first is this story by Kevin Drum, showing a real eye-opening chart on the Great Recession's impact on the poor:

Graph showing median household net worth from 2000 -- 2011.  From Kevin Drum.

If you look at the chart, Kevin shows that the net worth of the poor has dropped in a ten-year period, from zero to around -$6,000.  In fact, the median net worth has dropped for what is essentially the poor, the working, and possibly the middle class households.  Upper middle class households made some gains in their median net worth, while the extreme rich have taken huge gains in their net worth.  According to the Census Bureau report:

Between 2000 and 2011, experiences of households varied widely depending on their net worth quintile (See Figure 1). Median household net worth decreased by $5,124 for households in the first (bottom) net worth quintile,2 $7,056 (or 49.3 percent) for the second quintile, and $5,072 (or 6.9 percent) for the third quintile. Median household net worth increased by $18,433 (or 9.8 percent) for households in the fourth quintile, and by $61,379 (or 10.8 percent) for households in the highest (top) quintile (See Tables A1-A2 and Figure 2).

The distribution of net worth became more spread out between 2000 and 2011. The ratio of median net worth of the highest quintile to the second quintile increased from 39.8 to 86.8 between 2000 and 2011, and the ratio of the highest quintile to the third quintile increased from 7.7 to 9.2. The ratio of the highest quintile to the fourth quintile was 3.0 in 2000 and showed no statistically significant change over this period (See Figure 3).

Between 2010 and 2011, the ratio of median net worth of the highest quintile to the second quintile decreased by 3.85 percentage points, and the ratio of the highest quintile to the third quintile decreased by 0.25 percentage points.The ratio of the highest quintile to the fourth quintile showed no statistically significant change over this period.
The second story that I found is through The Daily Kos, showing a couple of calculator clocks on how much minimum wage workers have lost in pay due to inflation.  These clocks were created by The Center for Economic and Policy Research:



In a sense, both stories complement each other.  If you think about it, the poor are really the minimum wage workers in this country, living on paycheck-to-paycheck.  With the minimum wage remaining in stagnation for almost 30 years, these workers have lost anywhere between $3 to $6 trillion worth of wages due to inflation--whichever way you measure that loss.  These poor workers are the ones that are going to spend much of their paycheck on the goods and services that power the U.S. economy.  But with inflation eroding the minimum wage over a long period of time, and the double whammy of the Great Recession slamming into the poor, they are no longer living from paycheck-to-paycheck, but are falling behind.  They are no longer purchasing the goods and services that make up the U.S. economic growth.  And that creeping of the loss of household net worth and loss of wages due to inflation is moving up through the working and middle class.  

What we end up having is a lack of demand in the U.S. economy.  The loss of household net worth, coupled with the wage stagnation and loss through inflation, means that nobody has any money to spend on goods and services.  Or they are only spending on the bare necessities, such as food and shelter, but no extra goods, services, or luxuries.  The only group that seems to have the money to spend are the extreme rich, where businesses are catering to their tastes.  But there is only so much goods and services that the rich can buy--the rest of the money will have to be parked into more bank accounts, and invested in the Wall Street gambling casino, to generate even more income inequality for the extreme rich.  The rich get richer, the poor get poorer, and nobody will have any more money to spend--not just on goods and services, but even the basic necessities.  It is a system that is unsustainable.

Sooner or later, that system is going to collapse.

Sunday, August 17, 2014

Work scheduling software creates havoc on low wage employees' lives

I found this NY Times story on both Daily Kos, and Kevin Drum:


SAN DIEGO — In a typical last-minute scramble, Jannette Navarro, a 22-year-old Starbucks barista and single mother, scraped together a plan for surviving the month of July without setting off family or financial disaster.
In contrast to the joyless work she had done at a Dollar Tree store and a KFC franchise, the $9-an-hour Starbucks job gave Ms. Navarro, the daughter of a drug addict and an absentee father, the hope of forward motion. She had been hired because she showed up so many times, cheerful and persistent, asking for work, and she had a way of flicking away setbacks — such as a missed bus on her three-hour commute — with the phrase, “I’m over it.”
[....]
But Ms. Navarro’s fluctuating hours, combined with her limited resources, had also turned their lives into a chronic crisis over the clock. She rarely learned her schedule more than three days before the start of a workweek, plunging her into urgent logistical puzzles over who would watch the boy. Months after starting the job she moved out of her aunt’s home, in part because of mounting friction over the erratic schedule, which the aunt felt was also holding her family captive. Ms. Navarro’s degree was on indefinite pause because her shifting hours left her unable to commit to classes. She needed to work all she could, sometimes counting on dimes from the tip jar to make the bus fare home. If she dared ask for more stable hours, she feared, she would get fewer work hours over all.

“You’re waiting on your job to control your life,” she said, with the scheduling software used by her employer dictating everything from “how much sleep Gavin will get to what groceries I’ll be able to buy this month.”

Last month, she was scheduled to work until 11 p.m. on Friday, July 4; report again just hours later, at 4 a.m. on Saturday; and start again at 5 a.m. on Sunday. She braced herself to ask her aunt, Karina Rivera, to watch Gavin, hoping she would not explode in annoyance, or worse, refuse. She vowed to somehow practice for the driving test that she had promised her boyfriend she would pass by the previous month. To stay awake, she would formulate her own behind-the-counter coffee concoctions, pumping in extra shots of espresso.

Like increasing numbers of low-income mothers and fathers, Ms. Navarro is at the center of a new collision that pits sophisticated workplace technology against some fundamental requirements of parenting, with particularly harsh consequences for poor single mothers. Along with virtually every major retail and restaurant chain, Starbucks relies on software that choreographs workers in precise, intricate ballets, using sales patterns and other data to determine which of its 130,000 baristas are needed in its thousands of locations and exactly when. Big-box retailers or mall clothing chains are now capable of bringing in more hands in anticipation of a delivery truck pulling in or the weather changing, and sending workers home when real-time analyses show sales are slowing. Managers are often compensated based on the efficiency of their staffing.

Scheduling is now a powerful tool to bolster profits, allowing businesses to cut labor costs with a few keystrokes. “It’s like magic,” said Charles DeWitt, vice president for business development at Kronos, which supplies the software for Starbucks and many other chains.
Welcome to the world of Just-In-Time-Scheduling.   Just-In-Time is a production strategy where manufacturers reduce inventory, waste, and storage costs by ordering only enough parts to manufacture the product at the right time, right place, and right amount.  This type of manufacturing process started in the 1950s with Japanese car companies, and is pretty much adopted on a world-wide basis by manufacturers today.  Well, the Just-In-Time manufacturing model is now being adopted by companies for creating work schedules of employees in order to wring out even more efficiency.  Employees' work schedules are no longer created by managers, but rather sophisticated computer programs which factor in sales trends, economic indicators, and even weather patterns, to create a company work schedule with the right number of employees for both the day, and the hour.  The problem with these "workforce optimization systems"  is that they reduce the employee to a number that can be plugged in anywhere on a schedule to the benefit of the company's efficiency, while at the same time creating a havoc to the employee's work / life balance.  That employee will not have a regular, stable, weekly shift from they can both plan their life around and budget a stable paycheck.  Again from the NY Times:

Yet those advances are injecting turbulence into parents’ routines and personal relationships, undermining efforts to expand preschool access, driving some mothers out of the work force and redistributing some of the uncertainty of doing business from corporations to families, say parents, child care providers and policy experts.
In Brooklyn, Sandianna Irvine often works “on call” hours at Ashley Stewart, a plus-size clothing store, rushing to make arrangements for her 5-year-old daughter if the store needs her. Before Martha Cadenas was promoted to manager at a Walmart in Apple Valley, Minn., she had to work any time the store needed; her mother “ended up having to move in with me,” she said, because of the unpredictable hours. Maria Trisler is often dismissed early from her shifts at a McDonald’s in Peoria, Ill., when the computers say sales are slow. The same sometimes happens to Ms. Navarro at Starbucks.
By Saturday afternoon of the Fourth of July weekend, Ms. Navarro had made it through “clopening,” closing late at night and opening again just a few hours later. But she had not yet worked up the courage to ask Ms. Rivera and Ms. Rivera’s boyfriend, Oscar Nuñez, for help the next day with Gavin.
In a sense, Ms. Navarro's entire life--both her work life and personal life--has gone under complete control by Starbucks, all in the name of corporate efficiency.  As a minimum wage worker, her paycheck will fluctuate according to how many hours she will be working for each week.  The shift times will vary, according to when Ms. Navarro's Starbucks store will have their coffee rushes, and even the shift times will have an effect on her--Ms. Navarro does not have a car, and needs to take a bus to work, adding even more time to her commute.  This is an even greater hardship if Ms. Navarro is performing a "clopening," forcing her to sleep on the sidewalk before opening the store.  While Starbucks calls Ms. Navarro's fate"an anomaly," saying the company provides a week's notice on the work schedule as well as a stable schedule per employees' requests.  However, the NY Times interviewed current and recent Starbucks workers at 17 Starbucks stores around the country, and only two have confirmed that they received a week's notice on the schedule, with some employees saying they have received their schedule in as little as one day.

While scheduling software can be a useful, productivity tool, such a tool has been taken to extreme by Starbucks and other companies.  An individual human being has been replaced by a number in these software scheduling programs  to be used to maximize efficiency and profit for the company's benefit.  What is more, as these "numbers" are more likely part-time retail workers, who are at the low end of the social and economic scale with little resources and advancement.  They are one paycheck away from disaster, and if they complain to their managers about their erratic, software optimized, work schedule, they can be easily replaced by new hires.  These part-time retail workers are also trapped in this hellish, company optimized work schedule in that they are denied the stability they will need to take college classes and job training programs to improve their skills.   Ms Navarro was only a "few credits shy of an associates degree in business," before having to place her "degree was on indefinite pause because her shifting hours left her unable to commit to classes." 

We have sold our soul to the company store.





Saturday, April 26, 2014

The real Amazon drones

I found this story through the Huffington Post:
At least five days a week, Myron Ballard races around Washington, D.C., with a cargo van full of Amazon Prime packages. A career delivery driver with 20 years behind the wheel, Ballard typically gets paid $1.50 for each address he visits. If he delivers 150 Amazon boxes -- a fairly routine number -- he can pull in $225. Not bad for a day's work.
That is, until he starts tallying up all his out-of-pocket costs. Ballard works for an Amazon contractor called LaserShip. He's technically an "independent contractor," not an employee, meaning all of the costs stemming from the deliveries fall on him rather than on LaserShip or Amazon.
Ballard had to purchase the cargo van he drives for work. He doesn't get reimbursed for the wear and tear he puts on it; for the gasoline he pours into it on a near-daily basis; for the auto insurance he needs to carry; or for the parking tickets he inevitably racks up downtown. He doesn't even get reimbursed for the LaserShip uniform he's obliged to purchase and wear.
At the end of the day, much of that $225 has vanished.
"It's like they want us to be employees, but they don't want to pay for it," said Ballard, 45.
Anyone who shops regularly online, particularly with Amazon, has to marvel at how quickly and cheaply packages arrive on the doorstep these days. Many of the millions of Amazon Prime members -- including this reporter -- may have noticed, however, that not all packages are ferried by workers wearing the familiar UPS, FedEx or U.S. Postal Service uniforms. Instead, they’re sometimes handled by smaller companies like LaserShip, with drivers working on contract and out of their own vehicles.
Delivery drivers are the real Amazon drones -- workers who hustle to feed our growing demand for next-day or same-day delivery from online retailers. And as the e-commerce industry continues to grow, the drivers classified as independent contractors are the ones feeling the squeeze.
These particular drivers work under a system that shifts the costs associated with employment away from the company and onto the worker. In this arrangement, a busted transmission can be the difference between putting food on the table and being out of a job. That's partly why the service is so cheap for retailers, and, ultimately, for customers as well.
For starters, a delivery company using independent contractors avoids paying payroll or unemployment taxes on its drivers, as well as workers' compensation insurance -- nevermind basic workplace benefits like health coverage and a 401(k). Such companies also aren't obliged to pay workers overtime under federal law, meaning no time and a half when the delivery day stretches into a 12-hour shift. And since they pay drivers on a per-delivery basis, they don't owe them anything for non-delivery work, like loading the van at the warehouse before hitting the road, a task that can take up to two hours.
The arrangement also makes it virtually impossible for the drivers to unionize since they're non-employees.
"The biggest savings for the employers, and the reason they're so devoted to the business plan, is the workers’ comp and the tax stuff. It's really lucrative," said Catherine Ruckelshaus, a lawyer with the National Employment Law Project, a worker advocacy group. "The work is all dictated by the employer, and they're not investing anything in [the driver's] business."
The arrangement appears essential to the bottom line of LaserShip, a once-small "last mile" courier company founded in 1986 and based in Vienna, Va., that's grown right along with the e-commerce boom. Although as a privately held company LaserShip doesn't disclose its size or revenue, it now handles deliveries for Amazon and others in areas stretching from New England down to Florida. Without the elaborate and costly distribution network of, say, UPS, a courier company like LaserShip is well-positioned to perform fast, cheap deliveries in dense areas like Washington.
The story is fairly long, and especially illuminating on how companies are exploiting the independent contractor clause.  LaserShip has expanded their service area into New Hampshire, Rhode Island, West Virginia, and Delaware for driver deliveries, while at the same time, forcing drivers to accept new contracts which reduced their pay by around 10 percent.  LaserShip also extracts fees from driver's earnings through a $6 "administrative" fee, a $23 weekly "insurance" fee that is separate from drivers own auto insurance costs, and a $22.50 weekly fee to "lease" LaserShip's hand-held computers for scanning boxes for delivery.  According to the Huffington Post, "over the course of a year, a driver could pay as much as $1,170 for the privilege of renting a piece of equipment that the company requires him or her to use."  This doesn't even include the costs for vehicles, gas and maintenance that drivers need to spend for working their profession.

According to the Huffington Post:
A driver like Ballard can gross $60,000 a year if he's willing to work 80-hour weeks, but expenses will drive that haul down closer to $40,000. Then he takes a big tax hit come springtime, having had no withholdings throughout the year. He also gets no health coverage or paid time off through the job, and his pay fluctuates from week to week.

Despite his two decades in the field, Ballard said he now earns significantly less than he used to in a previous job with UPS. According to the job survey site Glassdoor.com, hourly UPS drivers earn an average of about $55,000 per year, and salaried drivers make $70,000 with benefits.
One current LaserShip driver, who asked to remain anonymous for fear of losing his contract with the company, said that when his vehicle recently broke down while delivering Amazon packages, he invested in a used van to make sure he kept his route. In addition to leveraging $7,000 of his own savings and credit, he took out a loan facilitated by LaserShip. The principal plus interest were deducted directly from his paychecks, which were reviewed by HuffPost.
After taking on debt in order to keep his job, the man was asked to accept a lower per-delivery pay, he said.
"That's part of their pitch: 'You're investing in your company,'" the driver said. "I thought I was investing. But now I'm facing a pay cut."
The problem is that companies have forced extreme cost cutting, reduced pay and incentives on the backs of drivers.  With LaserShip, there is no guarantee on the delivery routs or number of packages drivers are expected to deliver.  There is no job security for the drivers, and LaserShip can terminate the contract if a driver refuses to accept lower pay.  LaserShip is forcing the drivers to pay the cost of company equipment, such as the hand-held computers as "leases," and extracting profit from administrative and insurance fees.  In other words, LaserShip has discovered a loophole in misclassifying drivers as independent contractors, rather than employees, as a means to reduce costs and save money.  With the extremely tight labor market, and companies continued demand for increasing productivity in doing more with less, it is not surprising that companies like LaserShip can find contractor drivers to work for them at slave wages.   As the drivers are independent contractors, and not employees, there may be a diffusion of opinion and potential single voice to represent the interests of such contractors, or even to unionize.  But that change may be coming--at least in the courtroom.  According to the Huffington Post, a judge has approved a class-action settlement where LaserShip is required to pay $800,000 to drivers in Massachusetts due to this missclassifying of the drivers as independent contractors, giving them minimum wage and overtime protections. 

The problem doesn't just stop with LaserShip.  There is also a WalMartization effect taking place here.   According to the Huffington Post article, delivery companies are forced to relentlessly cut costs in order to maintain contracts with Amazon.com, and if they can't perform the work at the price Amazon demands, then Amazon will terminate the contract with the delivery service:
That's what a LaserShip co-founder, Farhang Aryan, suggested in a deposition related to the Massachusetts lawsuit. Aryan said an increase of 5 percent in what the company asks of its customers like Amazon could get it "terminated" from its contracts.
"I know of situations [where] a customer says, 'If you do not increase the rates, I will give you [an] additional year of contract, and if you want to do any increases, this has to go to a bidding process,'" he said.
William Deschenes, a former Lasership manager, noted in his deposition that Amazon is now LaserShip's largest customer by any measure. According to Deschenes' testimony, Amazon expects that 98.5 percent of its deliveries arrive on time, and LaserShip drivers are measured under a rubric known as "deficiencies per million opportunities," or DPMOs, i.e., failed deliveries. Drivers told HuffPost that LaserShip management informed them they could lose their work through Amazon if the drivers can't keep their DPMO levels down.
It isn't clear how large or small a piece of Amazon's delivery operation LaserShip handles, or how much the retailer relies upon companies using contractors and their personal vehicles. Amazon didn't respond to interview requests.
One of the plaintiffs in the Massachusetts lawsuit, Milton Sanchez, testified that LaserShip management suddenly cut his pay. He alleged that it was customary for drivers to be pressured "under duress" to sign new contracts lowering their own rate.
"At the beginning we were making a decent pay," Sanchez testified. "And then they started cutting, cutting. … They couldn't make money with the client, so they make money with us. That's the way I see it." Asked about the various costs that drivers are forced to swallow, Sanchez said, "You break it down, and I'll start crying."
 If what LaserShip's co-founder Aryan suggested is true, then even Amazon is complicity guilty in the abuses of independent contractors.  Amazon is forcing relentless cost-cutting of delivery service contracts on LaserShip, which forces more pay cuts and fees on its drivers, who end up performing the deliveries for almost no pay.  Again, it is do more with less, but only now it is Amazon that is forcing LaserShip to do more deliveries with less cost.  It is a system that can't sustain itself--sooner or later, the system will end up crashing.  If a driver for LaserShip is forced to sign contracts for less pay to LaserShip than last year, due to Amazon's insistence on reducing LaserShip's delivery rates for shipping Amazon's packages, then that particular driver is not going to be purchasing products through Amazon.  We have a reduction in demand for Amazon's products, and a need for delivery services through LaserShip.  This is a demand problem here.  If companies do not want to pay workers for labor, the workers are not going to purchase company products. 

Saturday Morning Cartoons--Superman Meets My Little Pony

 I saw this browsing through YouTube, and it is just brilliant.  Created by an animator named ToucanLDM, the Man of Steel is transported to My Little Pony's world, where he meets those cute, wide-eyed, talking ponies, and battles against both General Zod and evil ponies from taking over the My Little Pony kingdom. 


Saturday Morning Cartoons--Superman Meets My Little Pony:

Saturday, April 19, 2014

Barbie is dying!

I found this Huffington Post story:
* First-qtr net loss $0.03/share vs $0.11 profit year earlier

* First-qtr adjusted profit $0.01/share vs est. $0.09

* Sales fall 5 pct to $946.2 mln vs est. $952.9 mln

* Shares fall as much as 3 pct (Adds details, analysts comments; updates shares)

April 17 (Reuters) - Mattel Inc, the world's largest toymaker, reported its first quarterly net loss in nearly five years due to a double-digit fall in sales of its iconic Barbie dolls, sending the company's shares down as much as 3 percent in early trading.

Mattel's worldwide sales fell 5 percent to $946.2 million in the quarter ended March 31 due to lower demand for its key toy brands.

Sales of Barbie dolls fell 14 percent, while those of Fisher-Price line aimed at infants and preschoolers declined 6 percent.

Mattel has looked to newer products to boost sales as children increasingly opt for electronic games and other gaming activities over traditional toys that are decades old.

Barbie made her debut in 1959, distinguishing herself in the mass market for dolls with her fashion model-like figure.

"(Barbie is) still a $1.2 billion business. It is still very meaningful for Mattel and it is very hard to grow a $1 billion business," Morningstar analyst Jaime Katz told Reuters.
I don't know yet if Barbie is dying. I have a niece in sixth grade, and she was never into playing with Barbie--she wanted to play with My Little Pony, Littlest Pet Shop, and Leggos--Harry Potter Leggos first, and now Star Wars.  Competition in the toy market is intense,  with a range of themed toys competing for children's interests.  Even the toy doll market is competitive, with the wholesome Barbie going up against the semi-slutty Bratz Dolls, and the gothic Monster High Dolls--which are owned by Mattel!  It appears to me that there are more toy choices out there for girls than just Barbie. 

The Huffington Post story does give this interesting detail:
Mattel's gross sales declined 10 percent in the all-important holiday quarter as shoppers spent less on discretionary items such as toys, especially the action figures and preschool toys that represent the largest categories for Mattel and rival Hasbro Inc.
So the parents of children have a choice in spending their stagnating wages on either food or toys, which are they going to spend their money on?

NASA discovers first Earth-size planet inhabiting Goldilock's Zone

This story is just totally cool:

Using NASA's Kepler Space Telescope, astronomers have discovered the first Earth-size planet orbiting a star in the "habitable zone" -- the range of distance from a star where liquid water might pool on the surface of an orbiting planet. The discovery of Kepler-186f confirms that planets the size of Earth exist in the habitable zone of stars other than our sun.

The artist's concept depicts Kepler-186f , the first validated Earth-size planet to orbit a distant star in the habitable zone. [Click link below for more.]
Image Credit: 
NASA Ames/SETI Institute/JPL-Caltech
While planets have previously been found in the habitable zone, they are all at least 40 percent larger in size than Earth and understanding their makeup is challenging. Kepler-186f is more reminiscent of Earth.
"The discovery of Kepler-186f is a significant step toward finding worlds like our planet Earth," said Paul Hertz, NASA's Astrophysics Division director at the agency's headquarters in Washington. "Future NASA missions, like the Transiting Exoplanet Survey Satellite and the James Webb Space Telescope, will discover the nearest rocky exoplanets and determine their composition and atmospheric conditions, continuing humankind's quest to find truly Earth-like worlds."
Although the size of Kepler-186f is known, its mass and composition are not. Previous research, however, suggests that a planet the size of Kepler-186f is likely to be rocky.
"We know of just one planet where life exists -- Earth. When we search for life outside our solar system we focus on finding planets with characteristics that mimic that of Earth," said Elisa Quintana, research scientist at the SETI Institute at NASA's Ames Research Center in Moffett Field, Calif., and lead author of the paper published today in the journal Science. "Finding a habitable zone planet comparable to Earth in size is a major step forward."

The diagram compares the planets of our inner solar system to Kepler-186, a five-planet star system about 500 light-years from Earth in the constellation Cygnus. The five planets of Kepler-186 orbit an M dwarf, a star that is is half the size and mass of the sun. [Click link below for more.]
Image Credit: 
NASA Ames/SETI Institute/JPL-Caltech
Kepler-186f resides in the Kepler-186 system, about 500 light-years from Earth in the constellation Cygnus. The system is also home to four companion planets, which orbit a star half the size and mass of our sun. The star is classified as an M dwarf, or red dwarf, a class of stars that makes up 70 percent of the stars in the Milky Way galaxy.
 It was only a matter of time before the scientific instruments, imagination, and new means to discover such small, rocky, planets were to take place.  Now that we've discovered our first, Earth-like planet, I'm excited to hear when more will be discovered, or the discovery of liquid water on such planets, or even an oxygen atmosphere.  Then we can truly say that we are no longer alone in the universe.  Life exists on this neighboring star!

We just need to build one of these to to pay a visit:

Download Star Trek Enterprise into White Noise.  whitenoisemarket.com

Saturday Morning Cartoons--Superman "Volcano"


For this morning's Saturday Morning Cartoons, I'm posting 1942's Superman cartoon, Volcano.  From YouTube:

Chelsea Clinton is pregnant

I found this story through Americablog, which reported that former president Bill Clinton's daughter Chelsea Clinton is now pregnant.  And it appears that the famous Clinton First Couple, Bill and Hillary, are excited about being grandparents.

Okay.  Ho-hum.  Congratulations to Chelsea, and all the other young women who have discovered they will be expecting a package from the stork. Chelsea Clinton is married to investment banker Marc Mezvinsky. To me, this is a non-story. 

But then I went over to Talking Points Memo, and found two interesting stories.  The first is this story, where New York Times columnist Andrew Ross Sorkin speculates that Chelsea Clinton's pregnancy will become a "game changer" for the 2016 presidential election, and Hillary Clinton's presidential ambitions on MSNBC's Morning Joe program.  Sorkin believes that Hillary Clinton's grandmother status will result in a "softening effect" on Hillary's political image for the 2016 presidential election--even though MSNBC reported a Fox News poll showing Hillary's approval ratings remained unchanged after the pregnancy was announced:
Following a discussion about Hillary Clinton's poll numbers, the New York Times financial columnist eagerly turned the panel's attention to the real story.
"Can we talk about the human drama that is Grandma Clinton?" Sorkin asked, referring to Chelsea Clinton's announcement that she's pregnant.
"I don't want to be cynical and I'm not suggesting anyone's having a baby for election purposes, but —" Sorkin added before being drowned out by the panel's collective groans.
And with that, Sorkin had lost the room, despite his best efforts to salvage his argument. He insisted that the pregnancy was a game changer for Hillary Clinton.
"It's gonna change the dynamic of the campaign," he said.
How exactly?
"It's a softening, there's a compassion thing," Sorkin explained. "You don't think that over the next two years on the campaign trail this is gonna be part of the narrative? Come on. That's interesting."
The other panelists did not find his observation interesting.

Here is the video via Morning Joe:



I then saw a second story on Talking Points Memo, reporting Newsmax conservative host Steve Malzberg speculating that Chelsea Clinton's pregnancy was designed as a "prop" for Hillary Clinton's upcoming 2016 presidential run:
Hillary Clinton shoe-throwing truthers, meet Hillary Clinton baby-truthers.

Newsmax host Steve Malzberg on Thursday speculated that Chelsea Clinton's pregnancy was no accident, and that Hillary Clinton's grandchild would arrive just in time to serve as a "prop" for a widely expected 2016 presidential run.
"Now pardon the skeptic in me," Malzberg said. "Oh I can see Media Matters, I can see everybody going crazy on me now. Malzberg thinks this was a staged, planned pregnancy?"
"Well, now I'm not saying, when I say staged I have to believe she's pregnant, if she says she's pregnant," he continued. "I don't mean that they're making up she's pregnant. But what great timing! I mean purely accidental, purely an act of nature, purely just left up to God."
"And God answered Hillary Clinton's prayers and she's going to have the prop of being a new grandma while she runs for president," he added. "It just warms the heart, it brings a tear to my eye. It really does."
And here is the video:

 

 Looks like the crazies are really coming out to speculate on how a young woman's pregnancy will affect the outcome of a presidential election, that is still two years away!  It is complete madness here!  I could care less if a presidential candidate, Democrat or Republican, became an expecting grandparent before or during a presidential campaign.  Former Alaska Governor Sarah Palin became a grandmother a year before being picked as the GOP vice presidential candidate for 2012.  Did Sarah Palin's grandmother status affect my opinion of her as a political candidate?  Not really.  Although the story of Palin's grandmother status did raise a social issue of unwed teen pregnancy.

Personally, I'm going for CNN's take on the political impact of Chelsea's pregnancy for 2016--Chill Out and Shut Up!