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Big corporations suck the marrow out of the COVID-19 economy, leaving devastation behind them

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What’s the use of a crisis if big corporations and wealthy people can’t use it to make more money, preferably at the expense of those with less than them? I ask you! 

Well, by that standard, the coronavirus pandemic has worked out quite well. A large majority of the biggest publicly traded companies were profitable between April and September, but more than half laid off workers. Meanwhile, they watched small business revenue crash and many small businesses go under.

According to a Washington Post analysis, it breaks down like this: “45 of the 50 most valuable publicly traded U.S. companies turned a profit,” with an average of 2% revenue growth through the first nine months of the year. But at least 27 of those 50 firms had layoffs, leading to more than 100,000 people losing their jobs.

At the same time, small business revenue dropped 12%, with at least 100,000 small businesses closing.

To add insult to injury for the workers laid off by these large, profitable companies, many entered the pandemic with rah rah rhetoric about protecting their workers. Salesforce CEO Marc Benioff pledged “not to conduct any significant lay offs over the next 90 days.” He kept that promise. But about two months after that 90 days was up, Salesforce laid off 1,000 workers despite big profits.

This is 21st century corporate capitalism in action. Every disaster is an opportunity for more profit, and responsibility to the workers that make your company run is a meaningless concept. It’s one more reminder that claims about corporate tax cuts—like the ones the Republicans passed in 2017—meaning job creation should never, ever be believed. The tax cuts and the pandemic alike saw companies doing huge share buybacks to benefit the already wealthy, while workers reaped no benefit to speak of.

This blog originally appeared at Daily Kos on December 16, 2020. Reprinted with permission.

About the Author: Laura Clawson has been a contributing editor since December 2006. Clawson has been full-time staff since 2011, and is currently assistant managing editor at the Daily Kos.


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Philadelphia City Council votes to protect laid-off hospitality workers. More cities need to follow

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The coronavirus pandemic has devastated the hospitality industry, with the fallout still growing. This week the Philadelphia City Council took steps to protect workers when the economic recovery begins, unanimously passing legislation to give laid-off hospitality workers the right to be rehired when jobs start coming back. 

The bill could eventually help 12,000 Philadelphia hotel housekeepers, stadium attendants, airport food workers, and more. The Black Workers Matter Economic Recovery Package requires employers to offer laid-off workers jobs in order of seniority within their departments, with protection for cases where a contractor at a larger venue changes or a hotel changes ownership.

”This legislation protects our industry’s workers from any unscrupulous employers who might dare to use this pandemic to further their financial interests … at the expense of long-term employees who are overwhelmingly Black and are overwhelmingly female,” said UNITE HERE Local 273 President Rosslyn Wuchinich.

That’s a blow workers at Boston’s Revere Hotel are feeling right now—and legislation they could use from Boston lawmakers. Back in May, when HEI Hotels and Resorts furloughed the workers, it assured them, “Your date of hire will remain the same, since HEI recognizes your past service at the hotel.” But in November, HEI sent a different message: “We will be using the end of this year, December 31, to rescind earlier messaging on rehiring employees who were employed at the hotel prior to the HEI Hotels and Resorts transition,” a letter from human resources said. But hey, “when business does return to our hotel later in the year, we will post job openings to the public and if you are interested in applying at that time we will be happy to consider your application as a potential new hire.”

Some of the workers getting this message had worked at the hotel for decades.

“This is an industry that has already benefited from one bailout, it’s asking to benefit from the next bailout and frankly, it costs zero dollars to make a commitment that if someone’s job is recreated, they get that job back,” UNITE HERE Local 26 President Carlos Aramayo said. “The only reason I could see that a hotel would want to do this is that they want to hire a different person, maybe a younger person, maybe a person who is not a person of color.” Aramayo, whose union does not represent the Revere Hotel workers but is advocating for them, is concerned that hotels are using the pandemic as a chance to slash wages and benefits—not just now, but permanently.

Workers need protections that Congress isn’t going to give them, at least with Sen. Mitch McConnell in charge of the Senate. A patchwork of protections across cities and states is a terrible form of government, but at least Philadelphia is taking steps to help its vulnerable workers. Other cities should take notice.

This blog originally appeared at Daily Kos on December 12, 2020. Reprinted with permission.

About the Author: Laura Clawson has been a contributing editor since December 2006. Clawson has been full-time staff since 2011, and is currently assistant managing editor at the Daily Kos.


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The next blow for businesses: Tax hikes that threaten more layoffs

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Businesses across the nation could soon face state tax increases to pay for the surge in Americans filing for unemployment benefits this year, further straining employers at a time when many are fighting for survival.

Massachusetts, New Jersey and Alabama are among the states looking at tax hikes that could cost employers billions of dollars. It would be a gut punch for businesses struggling because of the pandemic — and some fear it could trigger even more layoffs or prevent new hires.

Governors have been pressing the federal government to come through with more funds, but talks between House Speaker Nancy Pelosi and the White House over a new economic relief package have dragged on for months with no deal in sight, and state aid is one of the major sticking points.

“We’re in a situation where we’re trying to actually get employers to bring people back to work,” said Rachelle Bernstein, vice president and tax counsel at the National Retail Federation. “You certainly don’t want to increase the taxes on employment, which is in essence what’s happening here.”

Both the federal government and states tax the wagesbusinesses pay in order to build up a store of funds in case of mass unemployment. Yet the extraordinary increase in the number of workers filing jobless claims since the pandemic hit in March caught the states by surprise, and the scale of layoffs sparked by the crisis already dwarfs those lost in the Great Recession, which lasted more than twice as long.

As a result, 21 states and the Virgin Islands have already exhausted the money in their accounts that pays for jobless benefits and are tapping into the U.S. Treasury-managed Unemployment Trust Fund for billions of dollars in federal loans to stay afloat. Congress waived interest on these loans in March for all states until the end of the year.

Once a state’s unemployment account dips into the red, it has little choice but to borrow from the Treasury or from private entities, because they are required under federal law to pay unemployment benefits.

Many states will need to cut benefit levels or raise taxes on employers to replenish those funds. The process is fairly routine: 27 states have a tax in place that automatically kicks in when the unemployment fund drops below a certain amount, according to the Tax Foundation. Thirteen of the states that are borrowing from the Treasury have laws on the books that call for an automatic tax hike. They include New York, New Jersey, Illinois, Pennsylvania, Texas and Massachusetts.

“It’s going to take many years for states to pay this back,” said Jared Walczak, vice president of state projects at the right-leaning Tax Foundation. “It’s going to mean higher [unemployment insurance] taxes for a very long time; it’s going to mean all of the costs associated with borrowing will be a fiscal constraint on states for many years to come.”

Glenn Spencer, executive vice president of employment policy at the U.S. Chamber of Commerce, said tax increases are inevitable given that more than 20 states are already borrowing tens of billions of dollars.

“That number is only going to go up,” he said. “So the potential tax burden on businesses across the board is only going to go up.”

In Massachusetts, businesses are staring down a tax hike of nearly 60 percent for 2021.

The state had a healthy balance in its unemployment trust fund in February, but job losses from the pandemic dried it up by July. The state now projects that the unemployment fund will have a nearly $2.5 billion deficit by the end of 2020.

Businesses will have to set aside on average $858 per employee in 2021, compared to $539 now. The costs will continue to rise, albeit at a slower pace, until 2024.

Christopher Carlozzi, the state director of the National Federation of Independent Business, said Massachusetts is hurting the job creators at the worst possible time.

“The state is looking to these small businesses to create jobs, but in the same breath, you’re making it more expensive to create that job,” said Carlozzi, whose group represents small businesses.

In New Jersey, unemployment insurance tax rates for employers could increase on average from 0.7 percent of payroll to 1.1 percent in July 2021. In total, businesses would see a hit of $919 million, according to an analysis by the state’s nonpartisan Office of Legislative Services.

A bill that’s working through the state Legislature would spread out the increase over a few years.

At a September hearing on unemployment issues, the state’s Labor Commissioner, Robert Asaro-Angelo, said what New Jersey really needs is help from the federal government in the form of cash assistance and extending the interest free loans that it’s getting from Treasuryinto next year.

“We are hopeful that there’s going to be relief for trust funds; we’re not the only state requesting this,” he said. “We hope that there will be direct funding for unemployment trust funds because that will ease the burden on employers in New Jersey and across the country.”

New Jersey is not alone. States across the country are seeking a life preserver from Washington with another aid package that could be used to bolster the unemployment trust funds. But President Donald Trump and Republican leaders are balking at giving money to Democratic-governed states like New York, California and Illinois, which they say are mismanaged.

Conservatives also argue that Washington shouldn’t give more money when states haven’t even spent all of the $150 billion that Congress set aside for them in March in the CARES Act to shore up their dwindling trust funds.

“There are a lot of states still sitting on coronavirus relief fund money that they’re allowed to be spending on unemployment compensation benefits right now and are not,” said Walczak of the Tax Foundation. He argues that states have been holding onto the CARES Act funds hoping Congress will pass another aid package that would forgive the loans or provide more flexibility for them to use the money for other priorities.

The New Jersey Business & Industry Association and other business groups have been lobbying for the state to put CARES Act money into the unemployment fund, but to no avail.

“The quicker the fund returns to good health, the more likely it is that the worst of the automatic tax increases can be avoided,” Christopher Emigholz, vice president of government affairs for NJBIA, said in testimony before the Legislature this month.

However, more than three-quarters of state and local governments recently surveyed by the Government Finance Officers Association said they have plans for the money and anticipated spending their share of the aid before the end-of-the-year deadline to use it.

At least a dozen states, including Georgia and Tennessee, used CARES Act funds to replenish their unemployment accounts.

But in some states, the aid wasn’t enough to stave off tax hikes. In Alabama, corporations are still staring at a 200 percent tax increase, even after Republican Gov. Kay Ivey put $300 million in CARES Act dollars into the fund.

Still, this tax rise will be much less severe than it would have been without the money. Alabama’s unemployment insurance tax rate was scheduled to go up from 0.65 percent to 3.95 percent, a more than 500 percent increase. Instead, the rate will increase to 1.95 percent.

“Without this infusion, employers could be facing an unemployment insurance tax increase of more than 500 percent, which could very well force many businesses to close their doors forever, resulting in even more job losses in Alabama,” Alabama Labor Secretary Fitzgerald Washington said in a statement.

On top of the increase in state taxes, businesses could be hit with a tax hike from the federal side as well.

States with dried-up unemployment funds have already borrowed more than $38 billion in interest free loans from the federal government. But the decision to eliminate interest on the loans was a temporary one, and starting next year, states will start accruing interest on what they borrow.

If they haven’t paid back the cash they owe by 2022, businesses in those locations will see a .06 percent increase in their base federal unemployment tax.

In the aftermath of the Great Recession of 2007-2009, 26 of the states and territories that borrowed from the federal government saw their federal unemployment tax go up because they didn’t pay back their loans in time, according to an analysis by the Urban Institute’s Wayne Vroman.

“Many states had debts for multiyear periods, and 11 programs were still making debt repayments in April 2016,” he wrote.

In a letter to congressional leaders earlier this month, the National Association of State Workforce Agencies urged lawmakers to extend the interest moratorium on unemployment insurance trust fund loans through 2021.

“With extreme claim loads, many states are borrowing in order to make UI payments,” the group, which represents unemployment agencies in every state and territory, wrote. “Given the continued economic stress, all state workforce agencies agree that a continued moratorium on interest accrual and payments is critical in order to avoid significant increased taxes and assessments on employers.”

This blog originally appeared at Politico on October 30, 2020. Reprinted with permission.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter.


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U.S. workers filed 881K claims for jobless benefits last week

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More than 880,000 people filed new applications for unemployment benefits last week, the Labor Department reported on Thursday.

The numbers are not directly comparable to previous weeks because of a change the Labor Department made in how it calculates the claims, which are seasonally adjusted. The number appears lower than the previous week’s 1 million claims, but that reflects a change in the Labor Department’s methodology rather than a strengthening of the U.S. labor market, economists say.

On an unadjusted basis, unemployment claims under state programs rose 0.9 percent from the previous week.

An additional 760,000 laid-off workers filed for jobless aid under the new pandemic unemployment assistance program, created for those not traditionally eligible for unemployment benefits like the self-employed and gig workers. That also marks a rise from the previous week’s 607,806 claims under that program.

Overall claims remain at historic highs. In total, more than 29.2 million workers are receiving unemployment insurance benefits, the Labor Department said, an increase from the prior week’s 27 million.

Why the change? The Labor Department regularly reports seasonally adjusted data, which accounts for expected changes in the labor market, such as when a large number of temporary retail employees get laid off after the holidays.

But economists say that methodology had been causing major distortions to the data during this recession, given how many workers were filing for unemployment due to unexpected coronavirus shutdowns. Experts welcome the change, which they say should make the numbers more accurate in the future, but they warn against trying to compare this week’s seasonally adjusted data to weeks prior.

Regardless of the change in calculations, non-seasonally adjusted data shows overall claims rose last week to 833,352 from 825,761 the week before.

What’s next: The Labor Department will report jobs numbers for the month of August on Friday. The July report showed an overall unemployment rate of 10.2 percent, and while most economists expect that number to fall slightly in August, many expect the pace of job growth will slow down.

This article originally appeared at Politico on August 24, 2020. Reprinted with permission.

About the Author: Megan Cassella is a trade reporter for POLITICO Pro. Before joining the trade team in June 2016, Megan worked for Reuters based out of Washington, covering the economy, domestic politics and the 2016 presidential campaign. It was in that role that she first began covering trade, including Donald Trump’s rise as the populist candidate vowing to renegotiate NAFTA and Hillary Clinton’s careful sidestep of the Trans-Pacific Partnership.

A D.C.-area native, Megan headed south for a few years to earn her bachelor’s degree in business journalism and international politics at the University of North Carolina at Chapel Hill. Now settled back inside the Beltway, Megan’s on the hunt for the city’s best Carolina BBQ — and still rooting for the Heels.


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Coronavirus has upended many lives, but immigrant journalists on visas face a grim reality

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For Trey Taylor, moving to New York City was nothing short of a dream come true. The Canadian citizen had worked tirelessly for about two years to secure a work visa that allowed him to work freely within the country. But when the coronavirus pandemic hit, the young journalist was unceremoniously terminated from his position at The Face Magazine. While the loss of a job is devastating for anyone, coupled with the anxiety around finances and securing unemployment, it came with deeper ramifications for an immigrant like Taylor.

With economic uncertainty on the rise and a recession looming, layoffs have hit almost every sector in the U.S., and the media has been no exception. From W Magazine, Conde NastThe AtlanticViceThe Outline, The Face, Culture Trip toThrillist—multiple publications have either laid off their entire staff or have had a significant number of furloughs, mostly as a result of business models that still rely on advertising—now largely dried up—for a significant chunk of revenue.

It did not help that the visa category Taylor was on, O-1B—a non-immigrant visa for individuals “who possess extraordinary ability in the sciences, arts, education, business, or athletics”—was particularly complex. Demonstrating being an “extraordinary artist” meant gathering tons of evidence showcasing his entire life’s work along with a series of expert recommendations and potential job offers from media companies. And the sudden loss of employment meant that Taylor’s visa would expire at the end of June unless he quickly redid the application process, since his status was tied to employment with a specific company.

“To save on costs, the owner of the company [in London] decided to close U.S. operations entirely, meaning that the company I was employed by would be shutting down as of June 30,” he explained. 
He is now working with his lawyer to find a way to put together a sizable portfolio of “proof” in  record time as the U.S. government has suspended the option for expediting a decision within two weeks. For now, his future hangs in the balance.

“That means I am unable to even return home to visit my family,” he said. “It’s a costly, byzantine process and it is causing me a lot of anxiety.”

Sadly, Taylor isn’t alone in this predicament. Just ask Alejandro Filippa, a partner at New York-based law firm Lehach & Filippa,that works with a number of journalists and creatives to help them secure an O-1B visa. Filippa says that while his inbox is always flooded with emails from curious artists, over the past two months, he has received several panicked inquiries from clients questioning “what to do.” 

“Without a new sponsor to employ them, there are certain solutions that can only act as a bandaid to remain in the United States, such as switching to a temporary visitor visa to get one’s things in order or to buy some time perhaps,” Filippa explained.

While some, like Taylor, have chosen to remain in the country as they figure out a solution, others left to go back home when the pandemic started and are now permanently stuck. 

“Jane Smith,” who prefers to use a pseudonym, was ecstatic when brought on board to work with a top financial magazine on an H-1B from Singapore earlier last year. While H-1B continues to be one of the most popular work permit categories, it is still a legally complex and expensive process for the sponsoring employer. Most journalists and artists know it’s a category largely used by finance and tech companies with more resources. Naturally, Smith, who was hired for a top editorial position, considered herself lucky—until now. 

Assuming her job was safe, she decided to return back home to spend the duration of the pandemic with her family. With offices shut for the time being, everyone was stuck working from home anyway, she thought. Weeks into April, panicked messages from colleagues started pouring in, telling her they’d been laid off or furloughed. Soon she received a notice of termination along with a lengthy apology from her superiors explaining they had run out of options. Under the terms of her visa, she cannot be furloughed, leaving them no choice but to end her employment. Employees under H-1B have about 60 days to find another job (within a strict salary bracket and industry) or face deportation—rarely enough time in ordinary circumstances, let alone when it means conducting a remote job search from abroad in the midst of a pandemic. 

“I’m stuck,” she said. “Companies aren’t willing to sponsor right now, as if it wasn’t challenging enough to be looking for a job in journalism. I’m still on a lease and I have furniture, and so much more stuff back in my apartment in America, that I didn’t bring along. It’s an absolute nightmare.”

“Unemployment for the H-1B raises a myriad of problems,” said Florida-based top immigration attorney, Tammy Fox-Isicoff. “Many professionals on the H-1B visa have leases, families in school, own homes, [and] have belongings. These ties can’t necessarily be undone in 60 days or less. Many cannot even travel back to their countries of nationality to due closed borders. There were requests made to the administration to offer some type of ameliorative assistance to these individuals. No assistance will be forthcoming.”

President Donald Trump has indicated he would halt issuing new work visas across multiple categories including H-1B to counter the soaring unemployment within the country.

For immigrant journalists of color, many of whom hail from disadvantaged backgrounds, all this can mean going back home for good and leaving their entire lives and career prospects behind.

“I’ve lived here for just over three years. I’ve established a home, career, a relationship here,” said Taylor. “I cannot fathom having to leave at this point. I’ve sacrificed enough as it is just to be here, and would hate to have to leave due to circumstances beyond my control. I was hoping to apply for a green card soon, but I’ve been told that is just impossible. My heart truly goes out to other immigrants, especially immigrants of color and those with dependents. It’s never easy to start a new life anywhere, but for immigrants there is seemingly so much more to lose.”

This blog originally appeared at Daily Kos on June 23, 2020. Reprinted with permission.

About the Author: Jeena Sharma is a writer and editor based in New York City. She writes extensively about politics, social justice, fashion, and culture.


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The H-1B Termination “Stinger” in the Era of COVID-19: What Employers Need to Know

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The ongoing COVID-19 pandemic and its global economic repercussions have forced many employers to make difficult choices regarding their workforces.  Businesses that employ workers who are not U.S. citizens must reckon with additional complications, as their decisions will affect both the employees’ livelihoods and their ability to remain in the United States.

Given these challenges, it is essential that companies consult an immigration attorney if they are considering personnel actions that would affect their foreign national employees, including layoffs, furloughs, and other terminations. (For more general information on the immigration consequences of workforce reductions, please see our prior H-1B Stinger article about this topic.)

Managing H-1B visas in these situations can be particularly complex, given the expansive network of underlying and inflexible terms and conditions. Employers that sponsor foreign nationals for U.S. employment through the H-1B visa program take on numerous exacting – and all too often unforgiving – obligations.  And on the employee’s side of the relationship, those who are laid off, furloughed, or fired will need to find new employment as soon as possible or else leave the U.S. indefinitely per the equally exacting obligations that the program imposes upon them.

Chin & Curtis previously published a post (linked above) that examines an employer’s obligations following the termination of an H-1B employee, and the substance of this piece still stands. As we noted, the 2006 case of Amtel Group of Florida, Inc. v. Yongmahapakorn essentially confirmed that the employer’s obligations under the H-1B and the LCA do not cease until the employer completes the following steps:

  • Notifying the Department of Homeland Security (DHS) that the employment relationship has been terminated; and
  • Offering payment to the H-1B employee for return transportation to their home country.

The termination of an H-1B employee that occurs prior to the expiration of the employee’s valid H-1B status can only be “bona fide” if the employer completes both of these two steps.

While the obligations outlined in our prior article still hold, there are two relevant updates that employers should be aware of in light of the current situation.

First, a new DHS regulation from 2017 institutionalized a “grace period” of up to 60 days, during which a terminated H-1B employee may remain in the United States to find new employment, secure a new immigration status, and/or wrap up their affairs and depart the US.  This change, while obviously beneficial for employees, is also welcome on the employer’s side, as it allows employers to execute terminations without putting their former H-1B employees in immediate legal peril.

Second, employers should consider the impact of the current climate on their protocols for offering payment for return transportation. For instance, how will travel restrictions, if any, affect the availability of return flights and how will airline service reductions impact the cost of the tickets? The applicable regulations leave a good deal of ambiguity around these and other questions concerning the offer of payment for return transportation costs, including whether an offer is sufficient as opposed to actual payment; whether the employer can set a limit to the cost amount; or whether setting a time limit for accepting the offer is appropriate. Absent any specific, regulatory guidance on these matters, employers are generally advised to use “reasonableness” as their guiding principle (though, of course, what is “reasonable” will depend on the situation).

Employers should therefore be mindful of the circumstances surrounding a COVID-19-related termination, including issues arising out of international travel restrictions– and should adjust their policies accordingly. 

About the Author: Phil Curtis has practiced immigration law for more than 30 years and is a founder of Chin & Curtis, LLP.  He has guided Chin & Curtis for the last seven years and now serves as Co- Managing Partner.  With more than 40 professionals dedicated to serving the immigration needs of the business community, Chin & Curtis is New England’s largest independent immigration law firm.


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Field Museum Workers Say It’s Time for the CEO to Start Making Sacrifices, Too

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Facing devasting pay cuts and layoffs amid the Covid-19 crisis, workers at Chicago’s Field Museum are organizing to demand greater transparency and equitable sacrifice from upper management.

“We fear these cuts will disproportionately impact staff of color and those already paid the least,” Field Museum workers explain in a petition that has now garnered over 1,700 signatures. “We are proud to call the Field home, and are prepared to make sacrifices to preserve it for generations to come. We are asking leadership to do the same.”

Best known for being the home of SUE, the most intact T. rex skeleton in the world, the Field is the nation’s third largest natural history museum after the Smithsonian and New York’s American Museum of Natural History. As of 2019, the museum had an endowment of approximately $440 million, up from $299 million in 2012.

The museum has been shuttered since mid-March due to the pandemic, and it remains unclear when it will be able to reopen to the public. Though the Field secured a loan from the federal Paycheck Protection Program and 70% of its revenue comes from sources other than ticket sales, at a May 19 virtual town hall with employees, CEO Richard Lariviere announced an impending 10% pay cut as well as an unspecified number of layoffs.

“At the town hall, we had a lot of staff proposing alternatives and various cost-cutting ideas like rotating furloughs, graduated pay reductions, and reducing hours, and asking if those had been explored,” says Anna Villanyi, an educator who has worked at the museum for two years. “But those ideas were dismissed without transparency about to what degree leadership had already explored them.”

Lariviere’s total compensation in 2018—the most recent year with available data—was $796,000. While the presidents of the Boston Museum of Science and American Museum of Natural History have respectively taken a 50% and 25%pay cut in light of the crisis, Lariviere reportedly dismissed the idea of reducing his own compensation as “a meaningless gesture.”

“A lot of museums are experiencing hardship due to this time, and we can see the different ways that is being addressed,” Villanyi tells In These Times. “We have such a large and seemingly financially stable institution that’s choosing not to make equitable moves like graduated pay cuts that other museums are doing.”

The Field Museum’s nearly 400 employees include scientists, collection managers, educators, technicians, guest services workers, maintenance workers and security guards. Many, like Villanyi, have been working from home during the pandemic, but others, like those who manage the upkeep of the museum’s exhibits, are not able to work from home.

Staff who can work remotely have been donating their vacation hours to their coworkers who don’t have the option of working from home, ensuring they continue receiving income. “It has been a really helpful act of sacrifice,” Villanyi says. “I believe it’s been over $200,000 worth of vacation hours that have been donated into that pool.”

In addition to aiding one another through the crisis, Field Museum employees have also been helping the public by sewing face masks and repurposing 3-D printers to make face shields for frontline workers.

The museum workers are specifically calling for a moratorium on pay cuts and layoffs until they can have a greater voice in cost-cutting measures, particularly by having a staff representative present at all future budget meetings.

“I’m hopeful that the increased awareness through our petition puts pressure on accountability for those things to happen,” Villanyi says.

Their organizing effort is being assisted by the Emergency Workplace Organizing Committee (EWOC), a joint project of the United Electrical, Radio and Machine Workers of America (UE) and the Democratic Socialists of America (DSA).

EWOC was launched shortly after the pandemic hit the United States to give non-union workers the resources needed to organize their own workplaces around coronavirus-related demands like hazard pay, sick leave and provision of personal protective equipment.

UE International Representative Mark Meinster says that over 1,000 workers from a range of industries including fast food, manufacturing, meatpacking, retail and higher education have received advice and assistance through EWOC on how to take workplace action around Covid-19 related issues.

With help from EWOC, workers around the country have already won several victories, including improved health and safety measures for grocery workers in Texas and Pennsylvania, and hazard pay for 250 Taco Bell workers in Michigan.

Meinster says that most of the work of EWOC is done through volunteers including DSA members, former Bernie Sanders campaign staff and UE activists.

“We’re building on models developed around the Bernie Sanders campaign of doing distributed organizing—where you’ve got a large group of motivated volunteers—and apply that model to workplace organizing,” Meinster explains. “That’s one of the keys to revitalizing a fighting labor movement. We’ve got to figure out how to go beyond mere staff resources and engage lots of motivated people out there.”

Meinster says the Field Museum organizing is a perfect example of workers organically coming together and reaching out to EWOC for assistance. “Like all museum workers, they’re facing some real difficult fights,” he says. “But here we’re seeing workers start to stand up and do something about it.”

This blog originally appeared at In These Times on June 12, 2020. Reprinted with permission.

About the Author: Jeff Schuhrke is a Working In These Times contributor based in Chicago. He has a Master’s in Labor Studies from UMass Amherst and is currently pursuing a Ph.D. in labor history at the University of Illinois at Chicago. He was a summer 2013 editorial intern at In These Times. Follow him on Twitter: @JeffSchuhrke.


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Why temporary layoffs may become permanent

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Forty-two percent, or 11.6 million, of all jobs lost through April 25 due to Covid-19 will become permanent, according to the University of Chicago.

The White House is downplaying the bulk of coronavirus-related layoffs as temporary. But as the worsening recession forces companies to downsize or shut their doors, economists warn that many of these departures will turn permanent.

The unemployment rate for May is expected to hit about 20 percent, coming on top of April’s 14.7 percent. Those statistics — likely underestimates because workers must be “actively looking” for jobs to be counted — would be the highest since the Great Depression.

But President Donald Trump’s advisers have found a different number to seize on: a Federal Reserve estimate, released earlier this month, that 91 percent of people who lost their jobs or were furloughed reported that they expect to return to the same employer eventually. This statistic, the administration officials say, is part of the reason the U.S. should reopen its economy.

“Besides the stock market, there are little glimmers,” Trump’s economic adviser, Larry Kudlow, said last week. “I don’t want to downplay the heartbreak because the numbers are not good for this quarter — bad, bad pandemic contraction — but there are little glimmers. A lot of the unemployed are temporary.”

But economists say shifting demands and the sheer breadth of the business closures mean that many of the lost jobs will never return — and to lean on the statistic as a sign of economic well-being is politically risky.

“That’s a high number, and that’s good,” said the Economic Policy Institute’s Heidi Shierholz, former chief economist at the U.S. Department of Labor, of the workers’ optimism about returning to their jobs. “But I think we absolutely have to think of that as an upper-bound on how many will be called back.”

“And what we don’t know is how much lower than that … will it ultimately be. The concern is that it’s going to be a lot lower.”

Forty-two percent, or 11.6 million, of all jobs lost through April 25 due to Covid-19 will become permanent, according to research from the University of Chicago’s Becker Friedman Institute. The study places these in three buckets: jobs lost to coronavirus-induced demand shifts, jobs at firms that don’t survive the pandemic and jobs lost due to post-pandemic concerns, such as social distancing.

“I understand that the administration and other folks are optimistic,” the conservative Heritage Foundation’s Paul Winfree, a former Trump aide, said of the temporary layoff numbers. But “I don’t think I can get behind those estimates.”

“We’re going to be dealing with this unemployment problem for quite some time,” Winfree said. “And ultimately, it’s going to plague the economy for months, if not years.”

Businesses in some of the hardest-hit industries have already announced thousands of closures. As of April, about 3 percent of restaurants in the country, once temporarily shuttered, have permanently closed, according to the National Restaurant Association. And manufacturing giants like Caterpillar, Polaris and Goodyear Tire and Rubber Co. are shutting down their once-furloughed factories for good, The Wall Street Journal reports.

“You probably had a lot of businesses in absolute good faith say ‘we’re going to call you back’ totally thinking they were going to, but will never do it,” Shierholz said. “Many may go out of business. And two, it’s very probable that in many cases [when they do reopen] they won’t need everyone.”

Even if businesses make it through the pandemic, continued social distancing and other altered consumer behavior mean that many of them are unlikely to be able to rehire their temporarily laid-off or furloughed workers, economists say.

“If it’s the case that for the next two, three years, far fewer people are going to go out and eat at restaurants, if cinemas and movie theaters are going to have to have semi-permanent social distancing reducing their capacity, then a lot of these businesses will become nonviable and these jobs will be permanently lost,” said Ryan Bourne, an economist with the libertarian Cato Institute.

By touting the majority of layoffs as impermanent, Bourne said, the White House is creating a dangerous precedent given the large degree of uncertainty.

“There’s a political danger to implying that things will just go back to normal, which is that you create the expectation that you’re willing to do what it takes to ensure that happens,” Bourne said. “If I was somebody in the Trump administration, I would not be wanting to create the expectation that 90 percent of existing work relationships … were highly likely to return because I think there’s still a huge degree of uncertainty as to whether that will happen.”

This blog originally appeared at Politico on May 28, 2020. Reprinted with permission.

About the Author: Eleanor Mueller is a legislative reporter for POLITICO Pro, covering policy passing through Congress. She also authors Day Ahead, POLITICO Pro’s daily newsletter rounding up Capitol Hill goings-on.


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America’s economic pain arrives on K Street

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Layoffs are happening, and a survey of trade groups shows revenue is down sharply at many of them.

Restaurants, hotels and tourism businesses are getting socked. Now their Washington lobbyists are, too.

K Street is in cutback mode: The International Franchise Association, the U.S. Travel Association and the National Rifle Association have all laid off staffers since the pandemic hit. Several law-and-lobbying firms have cut pay across the board and at least one well-connected Washington communications firm has applied for a small business relief loan.

A recent survey conducted by the American Society of Association Executives — essentially a trade group for people who lead trade groups — found that 35 percent of trade groups estimated they would lose at least a quarter of their revenue because of canceled events and conferences.

Even the massive U.S. Chamber of Commerce — which recently doled out millions in bonuses to executives and was feeling so flush in December that it seriously considered purchasing a Super Bowl ad — is slashing expenses.

The cuts have hit trade groups even as many of their lobbyists have been busier than ever, hustling to secure a piece of the trillions of dollars in coronavirus aid for their members. Doug Pinkham, president of the Public Affairs Council, said the pandemic had been “financially devastating” for many trade groups.

“Many of them rely very heavily on events for revenue, and that has just dried up,” he said.

Not every trade group that’s seen its revenue collapse has resorted to layoffs; many are weathering the pandemic relatively well. But the cuts show that Washington’s influence industry is not immune to the economic pain afflicting much of the rest of the country. While much of K Street has experienced a boom as companies have rushed to hire lobbyists to help them secure relief loans, others are hurting.

The International Franchise Association laid off a dozen people — about a third of its total staff — and stopped publishing its magazine as advertising revenue evaporated. While the trade group has had some success getting members to register for its digital events, it’s tougher to get sponsors for them.

“Franchise businesses were among the first to close and will in many cases, because of government mandated reopening schedules, be among the last to reopen,” Robert Cresanti, the trade group’s president and chief executive, said in a statement. “While the names on the front doors are well-known brands, these locally-owned small businesses often run on very tight margins and until customers can return, IFA’s revenues will likely see a similar decline.”

The U.S. Travel Association, which has lobbied aggressively for more federal funding for tourism bureaus and travel industry businesses, laid off some staffers and cut pay across the board after being forced to cancel its Las Vegas trade show, according to Tori Barnes, the trade group’s top lobbyist. And the NRA — which had been enduring a New York state investigation and internal power struggles before the pandemic hit — has laid off more than 60 people.

Some trade groups that haven’t resorted to layoffs are cutting costs elsewhere. In March, the U.S. Chamber of Commerce slashed some outside consultants, including ones assigned to CEO Tom Donohue. The consultants are on hold indefinitely. The leading business lobby also asked staffers to find ways to cut their divisions’ budgets by 20 percent, according to three people familiar with the matter.

It’s a jarring reversal from December, when the Chamber interviewed major New York ad agencies about airing a Super Bowl ad before dropping the idea, according to two people familiar with the matter. During a board meeting in Florida in early March, the Chamber also approved and later handed out several million dollars in bonuses to senior management right as the pandemic was heating up, according to the people. 

A Chamber spokesman said executive compensation is “heavily weighted toward non-guaranteed bonuses, which are paid in March and based on prior year performance.”

“Of course, we have been reviewing and reducing outside expenditures,” the spokesman said in a statement. “As the world’s largest organization representing the interests of businesses, the U.S. Chamber of Commerce is marshaling all of its resources to help as many businesses, families and industries as possible endure the financial hardships caused by the pandemic and return to work in a safe and sustainable way.”

Even some trade groups that are doing well are playing it safe.

The National Association of Realtors recast its annual Washington fly-in, which had been scheduled for last week, as a virtual event and drew nearly 30,000 participants — about three times the number who typically show up in person. The event was so successful that the trade group plans to switch to a hybrid in-person and virtual fly-in in the future once restrictions have lifted, said Bob Goldberg, the trade group’s chief executive.

Still, the trade group has frozen hiring and is slowing down renovations of its Washington office to save money.

The uncertainty has led at least one Washington firm, Precision Strategies, to apply for a Paycheck Protection Program loan, according to Tom Reno, its chief operating officer. The firm was started by three alumni of President Barack Obama’s 2012 reelection campaign, including Jen O’Malley Dillon, who’s now Joe Biden’s campaign manager. (O’Malley Dillon no longer works at the firm.)

Another consulting firm, Purple Strategies, is considering applying for one of the loans as well.

“We’re absolutely committed to keeping our employees on payroll and if a PPP loan is what it takes to do that, then we’re absolutely committed to pursuing one,” said Steve McMahon, one of the firm’s co-founders. Purple Strategies recently cut half a dozen positions but also plans to hire several people for Washington-based communications roles, according to someone familiar with the matter.

Neither trade groups nor firms primarily engaged in politics or lobbying are eligible to apply for Paycheck Protection Program loans, though some of them are fighting for the right to do so. The American Association of Political Consultants lost a lawsuit against the Small Business Administration last month alleging the program unfairly discriminated against such consulting firms. The group is appealing.

House Democrats voted last week to change the rules to allow trade groups to apply for the loans after the U.S. Travel Association and others lobbied them to do so. (U.S. Travel has argued the change would allow destination marketing groups — think Visit Idaho or Visit Baltimore — to receive badly needed aid.)

Still, many trade groups insist they don’t plan to apply for the loans even if they’re allowed to do so. It’s “is NOT something we would consider under any circumstances,” American Petroleum Institute spokeswoman Bethany Aronhalt wrote in an email.

Some trade groups are getting by fine so far. The National Association of Chain Drug Stores — which represents CVS, Walgreens and other pharmacies — hasn’t seen its finances deteriorate or laid off anyone, said Steve Anderson, its president and chief executive. 

But he fears for small groups with shallower pockets, including state-level trade groups. “I am greatly concerned about the financial health of trade associations moving forward,” Anderson said.

This blog originally appeared at Politico on May 23, 2020. Reprinted with permission.

About the Author: Daniel Lippman is a reporter covering the White House and Washington for POLITICO. He was previously a co-author of POLITICO’s Playbook and still writes Playbook’s “Great Weekend Reads” section on Saturdays and Sundays and the “Social Data” section of POLITICO New York Playbook.

About the Author: Theodoric Meyer covers lobbying for POLITICO and writes the POLITICO Influence newsletter. He previously covered the 2016 campaign for POLITICO and worked as a reporting fellow for ProPublica in New York. He was a lead reporter on ProPublica’s “After the Flood” series on the federal government’s troubled flood insurance program, which won the Deadline Club Award for Local Reporting. He’s a graduate of McGill University and Columbia University’s Graduate School of Journalism.


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Job losses have now hit 40% of low-income homes

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Thirteen percent of all U.S. adults, or 20 percent of people who were employed in February, were laid off or furloughed.

One in five American workers lost their jobs in March, including almost 40 percent of those in lower-income households, according to a Federal Reserve survey, underscoring the staggering impact of the coronavirus crisis.

The data — released hours after the Labor Department reported that workers filed almost 3 million new unemployment claims last week — is further evidence that the economic crunch is pounding poorer Americans the hardest. It comes as the country increasingly looks to the Fed to ease the pain of the recession and the central bank itself presses Congress to do more to halt the wave of layoffs.

“A clearer understanding of how families are coping with the changed economic landscape is vital as the Federal Reserve considers next steps to address fallout from the pandemic,” Fed Governor Michelle Bowman said in a statement.

Thirteen percent of all U.S. adults, or 20 percent of people who were employed in February, were laid off or furloughed as the pandemic began sweeping through the country in March, the Fed said. Another 6 percent of all adults worked reduced hours or went on leave without pay, the central bank found in the survey, included in its annual Report on the Economic Well-Being of U.S. Households.

For those who lost their job or were working fewer hours, only 64 percent expected to be able to pay off all their bills, compared to 85 percent of Americans who didn’t see their employment situation change.

Yet in a sign that Americans are maintaining their optimism, 91 percent of people who lost their jobs or were furloughed said they expected to return to the same employer eventually, suggesting that government efforts to keep workers tied to their current jobs might be working. Five percent in that group had already returned to work by the time of the survey.

Still, the numbers paint a grim picture: 39 percent of employed people in households making less than $40,000 lost their job or were furloughed in March. That compares to 19 percent of individuals in households making between $40,000 and $100,000, and 13 percent of people in households with an income above $100,000, a Fed official told reporters.

Meanwhile, 7 percent of workers took a new job or increased their hours. Overall, 23 percent of Americans reported lower income in March compared to February, while only 5 percent saw their pay increase.

Some people who saw their employment situation change for the worse might have been able to get new jobs or had second jobs.

Fed Chair Jerome Powell on Wednesday warned that the depth of the crisis could result in lingering pain for the economy and said further action by Congress to mitigate that damage would be worth the high cost.

“This reversal of economic fortune has caused a level of pain that is hard to capture in words, as lives are upended amid great uncertainty about the future,” Powell said.

The survey findings also highlight disparities among workers with different education levels, with financial well-being declining among those with a high school education or less.

People with more education also had more ability to work from home; 63 percent of workers with at least a bachelor’s degree worked entirely from home during the last week of March, compared to 20 percent of workers with a high school degree or less, and 27 percent of people with some college education or an associate degree.

The supplemental survey polled roughly 1,000 adults between April 3-6.

This blog originally appeared at Politico on May 14, 2020. Reprinted with permission.

About the Author: Victoria Guida is a financial services reporter covering banking regulations and monetary policy for POLITICO Pro. She covers the Federal Reserve, the FDIC and the Office of the Comptroller of the Currency, as well as Treasury, after four years on the international trade beat, most recently for Pro and previously for Inside U.S. Trade.


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