As Labor Day approaches, Hillman Judge Harold Meyerson asks where it all went wrong for the global economy…

Labor Day — that mocking reminder that this nation once honored workers — is upon us again, posing the nagging question of why the economy ceased to reward work. Was globalization the culprit? Technological change? Anyone seeking a more fundamental answer should pick up the September issue of the Harvard Business Review and check out William Lazonick’s seminal essay on U.S. corporations, “Profits Without Prosperity.”

The short answer is that corporations are paying out almost all their profits to shareholders. Lazonick’s research shows that this wasn’t always the case. From the end of the Second World War through the 1970s, big companies reinvested the lion’s share of their profits to hire more workers, raise wages, research new technologies, and generally grow their businesses–with positive effects for the larger economy. These days, large corporations spend most of their profits paying returns to shareholders and buying back their own stock. Companies started buying back a lot more of their own stock after restrictions on the practice were lifted during the Reagan Era. CEOs who are paid in stock options have a vested interest in buy-backs because they increase the value of the company’s stock. 

These days, 91% of corporate profits of S&P 500 companies go to shareholders, leaving just 9% for pay raises, R&D, or any other purpose. 

Corporations are systematically redistributing wealth from workers to investors, and if we don’t implement the reforms to curb this trend, the problem is only going to get worse. 

Reminder: Seats are still available for our upcoming panel discussion on the struggles of Bangladeshi and Cambodian garment workers, but space is limited. RSVP to alex(at)hillmanfoundation(dot)org

Join us on Thursday, Sept 11 at 6pm at SEIU 32BJ (25 W. 18th St, Manhattan) for a public forum on sweat shop labor, global supply chains, and what we can do to improve the lives of garment workers in Bangladesh and Cambodia.

The panel will feature New York State Comptroller Thomas DiNapoli, Bangladeshi labor leader Kalpona Akter, SEIU global strategies director Jeff Hermanson, and Judy Gearhart of the International Labor Rights Forum (ILRF). Anna Burger, former SEIU Secretary Treasurer, will moderate the panel. 

This event is sponsored by the Sidney Hillman Foundation, Balcony NY, and the ILRF. 

[Photo credit: SETCa BBTK, Creative Commons.] 

Join us on Thursday, Sept 11 at 6pm at SEIU 32BJ (25 W. 18th St, Manhattan) for a public forum on sweat shop labor, global supply chains, and what we can do to improve the lives of garment workers in Bangladesh and Cambodia.

The panel will feature New York State Comptroller Thomas DiNapoli, Bangladeshi labor leader Kalpona Akter, SEIU global strategies director Jeff Hermanson, and Judy Gearhart of the International Labor Rights Forum (ILRF). Anna Burger, former SEIU Secretary Treasurer, will moderate the panel. 

This event is sponsored by the Sidney Hillman Foundation, Balcony NY, and the ILRF. 

Space is limited. RSVP to alex(at)hillmanfoundation(dot)org

Unpredictable hours create chaos in the lives of low-wage workers. Today, Jodi Kantor of the New York Times shines a spotlight on the tyranny of unpredictable hours, which affects countless working people, but which typically receives scant attention from the elite media.

Jannette Navarro is a 22-year-old Starbucks barista raising a son on her own and working towards a college degree, but her unpredictable hours are wreaking havoc on her ability to build a stable life and advance in her career:

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.

Companies use high-tech computer scheduling to wring extra profit out of their operations by minimizing downtime, at the expense of the freedom and quality of life of their workforce. Workers are often expected to be available with little or no notice. These expectations make it difficult to schedule childcare and transportation, get an education, or plan any activity more than three days in advance.

Low-wage workers are gaining unprecedented visibility thanks to the efforts of groups like Fast Food Forward. As low-wage workers gain a stronger voice in the workplace, scheduling is sure to be a major issue.

Update: Starbucks has resolved to reform its scheduling policies in the wake of the New York Times story.  

[Photo credit: Bernard Polet, Creative Commons.]