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Biden administration weeks behind on Covid-19 workplace safety rules

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The federal worker safety watchdog is weeks behind on President Joe Biden’s deadline for the agency to issue mandatory workplace safety rules that experts say will fight the spread of the coronavirus and protect workers.

Shortly after taking office, Biden gave the Labor Department a March 15 deadline to decide whether such emergency rules were necessary, and it was widely assumed the department would recommend moving forward with them. But three weeks later, newly minted Labor Secretary Marty Walsh is asking the agency to continue reviewing the rule.

“Secretary Walsh reviewed the materials, and determined that they should be updated to reflect the latest scientific analysis of the state of the disease,” a Labor Department spokesperson told POLITICO. “He has ordered a rapid update based on CDC analysis and the latest information regarding the state of vaccinations and the variants. He believes this is the best way to proceed.”

Biden campaigned on making Covid-19 guidelines — currently just optional recommendations for employers — into mandatory rules. Business groups and unions have been bracing for the Occupational Safety and Health Administration to release an emergency workplace safety standard that would immediately require employers to take steps to protect their workers from exposure to the virus.

The rule was expected to at least mandate CDC guidelines on mask wearing, which some industry groups have warned would create headaches for businesses in the states that have already moved to rollback social distancing and mask requirements for businesses. It also would likely require employers to develop a Covid-19 response plan, similar to a required fire drill, for how the businesses would respond if someone was exposed to the virus at work.

The delay is raising concerns among former workplace regulators and worker advocates, who fear Biden may be dropping an essential piece of his Covid-19 response plan, as well as sowing confusion in the business community.

“I’m concerned that there are administration staff who incorrectly believe that the pandemic is under control and that an ETS isn’t necessary,” said David Michaels, who led OSHA during the Obama administration.

“The CDC director is pleading with the country to take precautions, but workers can’t take those precautions” without an ETS, said Michaels, now a professor of occupational health at George Washington University.

Business groups are also scratching their heads after broadly expecting the rules.

“I’m as in much of a befuddlement as anyone,” said Marc Freedman, vice president of employment policy at the Chamber of Commerce. “This sounds like Secretary Walsh and the DOL are grappling with what everyone else is seeing — the increasing success of the vaccines raises serious questions about whether an ETS is justified, such as whether employees are still in ‘grave danger,’ and an ETS can be called ‘necessary.’”

The longer it takes for the Biden administration to release the rule, the harder it could be for the rule to stand up to legal challenges, according to Freedman and attorneys who specialize in workplace safety law.

OSHA only has the authority to issue an “emergency temporary safety standard” if it determines that workers are “in grave danger” due to exposure to something “determined to be toxic or physically harmful or to new hazards.” But that justification could be slipping as the Biden administration rushes to get Americans vaccinated against the virus.

While Biden administration officials have been warning that more contagious strains of the virus are taking hold, the president has been moving to expand access to the vaccine and was optimistic in his last message to the nation, promising Americans a return to some sense of normal life by Independence Day.

Republicans, who have been broadly opposed to any mandatory safety rules, are criticizing what they see as a mixed message from the administration.

“The Biden administration is speaking out of both sides of its mouth,” said Rep. Virginia Foxx (R-N.C.), the top Republican on the House Education and Labor Committee. “The President claims every adult will be eligible for a vaccine in May and then argues an immediate ‘emergency’ standard is necessary to curb the crisis.”

“This politicized process highlights the Biden administration’s blatant incompetence and hypocrisy. The federal government must not add more uncertainty and bureaucratic red tape for job creators, workers, and consumers as we continue to emerge from this crisis.”

But worker-safety experts say that the longer the Biden administration waits, more workers will get sick with the virus and could die.

“We are deeply concerned about when the standard is coming out. Basically workers have been going for a year facing untold numbers of illnesses and deaths without just a basic agreement that employers need to create a safety plan,” said Marcy Goldstein-Gelb, co-executive director of the National Council for Occupational Safety and Health.

“It’s essential, it’s life saving and it needs to come out now,” she said. “We can’t wait another day for this.”

This blog originally appeared at Politico on April 7, 2021. 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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Can a Federal Job Guarantee Unite the Left?

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As left-wing economic policy proposals go, a federal job guarantee has never quite reached prime time status, despite the fact that the underlying idea has been around since at least 1944, when President Franklin Roosevelt proposed it as part of his ?“Economic Bill of Rights.” Now, with Democrats in control of the federal government and as the nation tries to emerge from the economic devastation of the pandemic, a progressive coalition led by Rep. Ayanna Pressley (D?Mass.) is attempting to push a job guarantee into the political mainstream. 

Two weeks ago, Pressley introduced a resolution in Congress calling on the federal government to create a job guarantee program, run through the Labor Department, that would provide a job to anyone who wants one. (The fact that she introduced a resolution rather than a bill is a sign that this is just the beginning of a long process of building political support.) She frames the job guarantee as a powerful racial justice policy, citing the work of Sadie Alexander, the first black economics Ph.D. in America; of civil rights leader Bayard Rustin, who called for a job guarantee more than 50 years ago; and of Martin Luther King Jr. and Coretta Scott King, who both championed the idea. 

“The March on Washington has been, for most, just defined by the ?‘I Have a Dream’ speech. But it was a march for jobs and freedom,” Pressley said. ?“It’s time, if we’re really serious about a reckoning, that we enter into a third reconstruction to truly have a robust and just recovery from this pandemic, and a federal job guarantee should be a part of that. Economic justice is racial justice.” 

Pressley’s proposal would provide jobs paying at least $15 an hour, and offering standard benefits like health insurance and paid sick leave. She floats a number of examples of projects that could be accomplished by people employed in the program, including child and senior care, added school staffing, infrastructure and community projects, disaster relief, environmental sustainability work, and a revival of the WPA’s Depression-era public employment projects for artists and writers. While other grand economic reforms, like universal basic income, are often presented as replacements for our current structure of government benefits, Pressley is emphatic that the jobs guarantee would be purely an expansion?—??”a supplement to, not a substitute for”?—?our current social safety net and unemployment insurance. 

One alluring quality of a job guarantee is that it could fit snugly together with almost any other progressive priority. Its army of workers could improve public education and public healthcare. It could serve as the jobs program for Green New Deal projects. And given the correlation of poverty, unemployment and race in America, it would automatically have the effect of attacking the economic inequities that have only been exacerbated by the job losses and health impacts of coronavirus. 

“We just saw those very sobering jobs numbers come out. And they really prove the old adage: That when white America gets a cold, black folks get pneumonia,” Pressley said. ?“That is as literal as it is metaphorical. It’s true when it comes to Covid. It’s true when it comes to how our economy works.” 

A federal job guarantee would effectively serve to set the floor on the labor market?—?private employers would have to raise their pay and benefits to match or exceed those of the government in order to attract any employees. Seen in this light, it could be extremely attractive to labor unions: They would no longer have to fight to win anything less than what was provided by the government’s own jobs. 

“If you do a job guarantee correctly, and you build in certain requirements, you are setting a standard. It’s a little bit like having a minimum wage. You’ve got to lift the floor to raise the roof. You don’t want to have to be competing with the absolute lowest standard of work,” says Sara Nelson, the head of the Association of Flight Attendants and a vocal supporter of the policy. ?“What you legislate, you don’t have to negotiate.” 

Many unions spend time and effort fighting for diversity and against discrimination in the workplace, but Nelson points out that Pressley’s policy could stamp much of this discrimination in one fell swoop. ?“If you have an assumed rate of unemployment, that means you are not selecting people for certain jobs. And that gives room for discrimination,” Nelson says. A policy eliminating that accepted unemployment rate ?“doesn’t give any space for discrimination. It helps to close that racial and gender gap.” 

Nelson also points out that the federal job guarantee could be another way to achieve some of the provisions of the PRO Act—a bill that would radically improve America’s current labor laws and is a top priority of unions, but which is unlikely to pass in Congress unless the filibuster is done away with. The prospect of using a job guarantee to raise labor standards that have languished for decades could be an attractive incentive for organized labor to flock to the issue as its profile grows. 

As the public perception of what is ?“radical” continues to shift, it’s not unreasonable to imagine that a job guarantee could be the rare policy that naturally unites labor, environmentalists and racial justice activists all at once. Still, it will not advance in Washington without answering the inevitable ?“How will you pay for it?” question. The economist Darrick Hamilton estimated in 2015 that a federal job guarantee would have an all-in cost of around $50,000 per job?—?$750 billon to employ the 15 million unemployed at the peak of the Great Recession, though far less during normal years. That is a large number, but it is comparable to the U.S. defense budget, and less than half of the current coronavirus relief bill now making its way through Congress. 

Considering the far-reaching economic and social benefits that the elimination of unwanted unemployment would provide, that might be a bargain. And, as Pressley points out, the cost is a matter of perspective. ?“The reality,” she says, ?“is that we’re already paying for not having this policy.” 

This blog originally appeared at In These Times on March 3, 2021. Reprinted with permission.

About the Author: Hamilton Nolan is a labor reporter for In These Times. He has spent the past decade writing about labor and politics for Gawker, Splinter, The Guardian, and elsewhere.


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Biden picks Boston Mayor Marty Walsh for labor secretary

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President-elect Joe Biden is nominating Boston Mayor Marty Walsh for labor secretary. Walsh’s history with labor goes back to his early 20s, when he joined Laborers’ Union Local 223 in Boston, a union to which his father had long belonged, and one later headed by his uncle and then by Marty himself, who went on to be the head of Boston’s Building and Construction Trades Council before becoming mayor in 2013.

Walsh was seen as a union favorite, with support from AFL-CIO President Richard Trumka as well as the American Federation of Teachers and the American Federation of State, County and Municipal Employees. What he is not is an addition to the diversity of Biden’s Cabinet, as another top contender, California Labor and Workforce Development Agency Secretary Julie Su, would have been. (Su is also a rock star who would have done an amazing job.)

But Harold Meyerson recently made the case that Walsh is also not the your-grandfather’s-union throwback he might appear on the surface to be, coming from the very white, very very male, and comparatively conservative building trades unions. 

Walsh’s “own work in that movement,” Meyerson wrote, “has been to push the trades into the 21st century. As mayor, Walsh prodded the city council to approve his proposal requiring construction companies working on public projects or private projects exceeding 50,000 square feet to have 51 percent of their workers’ hours go to city residents, 40 percent to minorities, and 12 percent to women. He has also pushed the building trades into supporting a host of progressive causes.”

There is something to be said for a labor secretary who is of the white working class but has progressive priorities.

”He’s been at the forefront when it comes to promoting people of color, making sure people of color have a fair shake,” AFSCME’s Lee Saunders told Meyerson. The AFT’s Randi Weingarten also spoke highly of Walsh’s ability to get stuff done, another important qualification.

Will Marty Walsh be the most aggressive and effective labor secretary Biden could have chosen? Eh, probably not. But don’t write him off as just another Irish-American building trades guy.

This blog originally appeared at Daily Kos on January 7, 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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‘Yet another major, ideologically driven last-minute rule change’ from Team Trump

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Donald Trump began his time in the White House by dismantling as many Obama-era regulations and rules as he could—ones that protected workers, or the environment, or consumers. Now he’s ending his time in the White House by rushing to lock in as many avenues for discrimination and pollution as possible. The Labor Department has just finalized a rule giving federal contractors more leeway to hire and fire based on religious reasons

A senior Labor Department official “emphasized that the rule could not be used as a pretext for religious organizations to discriminate against people on the basis of protected categories like gender or race,” The New York Times reports. But there are a lot of categories that are ripe for discrimination—LGBTQ workers are very high on the list, but so are unmarried pregnant women, the Times notes. And organizations can expand the roles in which they can hire exclusively from within their faith.

“The final rule would significantly expand eligibility for federal contractors to claim a religious exemption from non-discrimination rules,” Public Citizen’s Matt Kent told Government Executive. “It’s an invitation for any contractor that’s loosely affiliated with a religious purpose to discriminate against LGBTQ employees. Yet another major, ideologically driven last-minute rule change from the Trump administration.”

“It is hard to overstate the harm that the Office of Federal Contract Compliance Programs is visiting on LGBTQ people, women, religious minorities, and others with the sledgehammer it is taking to federal nondiscrimination protections,” Lambda Legal’s Jennifer Pizer said in a statement. “For nearly 80 years, it has been a core American principle that seeking and receiving federal tax dollars to do work for the American people means promising not to discriminate against one’s own workers with those funds.  This new rule uses religion to create an essentially limitless exemption allowing taxpayer-funded contractors to impose their religious beliefs on their employees without regard to the resulting harms, such as unfair job terms, invasive proselytizing and other harassment that make job settings unbearable for workers targeted on religious grounds.”

She continued: “The Department of Labor has crafted a grotesquely overbroad exemption that will be used by many federal contractors as a totally improper, catch-all defense to discrimination complaints. The rule allows contractors, including large for-profit companies, to use the special treatment designed for religious organizations if they merely ‘affirm [] a religious purpose in response to inquiries from a member of the public or a government entity.’ This adds yet another gaping hole to the Swiss cheese the Trump administration has been systematically making of our country’s essential civil rights protections.”

The new rule goes into effect on Jan. 8, 12 days before President-elect Joe Biden takes office. He would likely have to go through a long process to make a new rule to replace it.

This blog originally appeared at Daily Kos on December 8, 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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Labor Department reports 36.5 million unemployment claims over 2 months

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Thursday’s report brought the eight-week total of coronavirus-induced layoffs to 36.5 million.

Workers filed nearly 3 million new unemployment claims last week, the Labor Department reported Thursday, signaling that a wave of coronavirus-induced layoffs is continuing as the country struggles to reopen for business.

The latest number, which covers the week ending May 9, pushed the two-month tally of unemployment claims to 36.5 million, reflecting a jobless rate that the Bureau of Labor Statistics acknowledged last week is the worst since the Great Depression of the 1930s.

The figure is “another sickening punch to the gut,” Mark Hamrick, senior economic analyst for Bankrate, said in a statement. “And, we need to be braced for more incoming body blows with respect to economic data,” he said.

As high as the official unemployment rate is — BLS said it reached 14.7 percent in April — that likely understates the damage, because large numbers of people misclassified themselves as employed but absent from work, artificially suppressing the jobless rate by about five percentage points.

Unemployment claims by week

“We’re going to see high levels of unemployment for a long time, meaning nine to 18 months,” predicted Tom Gimbel, founder & CEO of LaSalle Network, a national staffing and recruiting firm. “The whole labor model is going to change.”

As most states begin allowing non-essential businesses to reopen their doors, Gimbel said he expects many companies to favor temporary over permanent hiring.

“We’ll see an increase in temporary staffing, because companies are going to be concerned about a resurgence,” Gimbel said. “People don’t want to commit to full-time staff.”

Workers who are called back face a choice between potentially risking their health or losing unemployment benefits. On Monday, DOL “strongly encouraged” state unemployment agencies to find out from employers whether benefit recipients refuse to return to work, as federal guidelines dictate that those workers will no longer be eligible.

The data released by DOL Thursday also indicated that self-employed workers who were made eligible for jobless benefits under a new temporary program, Pandemic Unemployment Assistance, have finally begun to tap into the relief.

In the week ending April 25, 3.4 million Americans were receiving benefits from the program, up from fewer than 1 million the week prior.

In Washington, lawmakers have been unable to agree on next steps to address the economic pain caused by the virus.

House Speaker Nancy Pelosi has scheduled a vote Friday on a new $3 trillion relief package that would include an extension through January of the $600 sweetener to weekly unemployment checks, which is set to expire at the end of July, and another round of direct payments. President Donald Trump and Senate Republicans oppose the plan, and say they prefer to assess the effects of the $2 trillion CARES Act.

But Federal Reserve Chair Jerome Powell said Wednesday that further congressional stimulus would be worth the price.

“The record shows that deeper and longer recessions can leave behind lasting damage to the productive capacity of the economy,” Powell said at a virtual event hosted by the Peterson Institute for International Economics. “Additional fiscal support could be costly but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery.”

The Fed chief said the central bank will release a survey on Thursday showing that nearly 40 percent of people in households making less than $40,000 a year had lost a job in March.

Over the short term, financial losses are already devastating. About half of Americans say they’ve lost income and savings due to the effects of the coronavirus, a National Bureau of Economic Research survey found. On average, those Americans said they’ve lost $5,293 in income and $33,482 in wealth.

This blog originally appeared at Politico on May 14, 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. Prior to joining POLITICO in August 2018, Rainey covered the Occupational Safety and Health administration and regulatory reform on Capitol Hill. Her work has been published by The Washington Post and the Associated Press, among other outlets.


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’No words for this’: 10 million workers file jobless claims in just two weeks

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Rebecca Rainey
Nolan D. McCaskill

Unemployment claims soared to a record-smashing 6.6million last week, the Labor Department reported, more than double the previous week, signaling more economic pain from the coronavirus pandemic.

The rush to claim unemployment benefits occurred as the number of people testing positive for the coronavirus rose above 200,000 and government measures to contain the epidemic shut down increasing swaths of the U.S. economy, with residents in 37 states now ordered to stay at home.

The total job losses in just two weeks — almost 10 million Americans — amounts to a staggering, sudden blow to American workers never seen before in the U.S. economy. The labor market in the coming weeks could blow past the 15 million jobs lost at the peak of the 18-month Great Recession from 2007 to 2009.

President Donald Trump, who built his record for the past three years in office around economic growth and job growth, has now seen gains from much of the past decade evaporate in a matter of weeks. An official U.S. jobless rate that sat at 3.5% in February is poised to top 10% in April alone, eclipsing the peak of the last recession.

“In one line: No words for this,” Pantheon Macroeconomics Chief Economist Ian Shepherdson wrote in reaction to the numbers.

“What we are going through now dwarfs anything we’ve ever seen, including the worst weeks of the great recession,” tweeted Heidi Shierholz, chief economist at the left-leaning Economic Policy Institute. “I have spent the last twenty years studying the labor market and have never seen anything like it.”

The new figure, which represents unemployment claims filed the week that ended March 28, marks the largest number of weekly claims ever recorded since the government began collecting such data in 1967. The second-highest number of claims were the 3.3 million filed the week before, and the third-highest about 700,000 claims filed one week in 1982.

The new unemployment claims figure was seasonally adjusted, but the raw numerical increase was still a record-breaking 5.8 million claims.

In a prepared statement, Labor Secretary Eugene Scalia said, “The administration continues to act quickly to address this impact on American workers.” He then pointed to the recent coronavirus relief package approved by Congress and a final rule issued by the Department of Labor Wednesday enacting temporary paid leave requirements for businesses with fewer than 500 employees. Covered employers must give workers who are quarantined or experiencing coronavirus symptoms two weeks paid sick leave, and an additional ten weeks leave to workers who are caring for children stuck at home.

Reports from state unemployment offices, which are still struggling to meet the high volume of requests for unemployment benefits, continue to suggest DOL’s weekly claims figure significantly understates the real number of Americans seeking help.

“We’re hoping today’s reading will be the peak, but we can’t be sure,” Shepherdson of Pantheon wrote in an email. “In any event, total layoffs between the March and April payroll surveys look destined to reach perhaps 16-to-20 [million], consistent with the unemployment rate leaping to 13-to-16 [percent].”

Additionally, the number doesn’t capture self-employed workers, who are not eligible for state unemployment benefits. But under a new temporary program that was signed into law one day before the reporting period ended, gig workers will be eligible to apply to state unemployment offices for up to 39 weeks unemployment benefits that will be funded entirely by the federal government. States are awaiting guidance from DOL on how to put this new program into effect.

Also left out of the count are people who left the workforce voluntarily for any reason — including to care for a sick family member, a child home from school, or because they are sick, themselves, from Covid-19, the illness caused by the unique coronavirus.

The Congressional Budget Office released an updated economic forecast on Thursday that suggests the effects of mass joblessness and business closures will sting for some time, with an unemployment rate as high as 9 percent by the end of 2021.

In the nearterm, the CBO projected that the jobless rate will blow past 10 percent in the second quarter of this year, with GDP expected to fall by 7 percent over the next three months.

Director Phillip Swagel cautioned that CBO’s estimates are “very preliminary“ and “based on information about the economy that was available through this morning,” warning the numbers are subject to change and even worsen. The projections assume that social distancing continues across the country for an average of three months and that later outbreaks of the virus are possible, he said.

The increase in claims remained concentrated in the services industries, according to DOL, particularly accommodation and food services. States also reported increases in claims from workers in thehealth care, manufacturing, retail and construction industries.

The greatest number of new unemployment claims were in California, which processed an estimated 878,727 claims last week. That figure is up from 186,333 in the previous week and more than 21 times the typical volume the department handled before the pandemic.

California’s employment agency, which is handling the onslaught of claims, has said it has not experienced delays, but Twitter is awash with complaints from workers about overloaded phone lines, difficulties filing online and confusion about how to apply for federal CARES Act relief as independent contractors.

To speed up the approval process, the department has added hundreds of employees to process claims. It has also relaxed its initial verification requirements at the direction of the state’s labor secretary, allowing the checks to go out more quickly.

After California, Pennsylvania was next with 405,880 new claims.

New York, which leads the country in confirmed coronavirus cases, reported 366,403 new claims last week. That figure, however, is likely a massive undercount. The official tally is almost certainly missing vast numbers of New Yorkers who have been frantically attempting to file claims with the state’s outdated website and telephone lines to no avail.

In addition to the anecdotal evidence of dropped calls and online applications interrupted by crashes, the DOL report sheds some more light onto just how few residents are getting through: New York state had to revise its jobless claim numbers from earlier in the month upward by nearly 85 percent.

“Today’s jobless report shows the grim reality of the coronavirus’ crippling effect on our economy and working families,” Senate Minority Leader Chuck Schumer (D-N.Y.) said in a statement. “The Department of Labor must move heaven and earth to — as quickly as possible — get the expanded unemployment benefits Congress passed last week into the pockets of workers who have lost their paychecks through no fault of their own. America’s workers and families cannot afford a delay.”

New Jersey, which has recorded 22,255 positive cases of Covid-19 since early last month, reported 205,515 unemployment claims.

Illinois has been taking steps to update and streamline unemployment claims. The state received more than 114,000 claims last week.

Over the past few weeks, the Illinois Department of Employment Security website has been moved to a new hardware infrastructure to handle the increased demand. Web, storage and processing capacity has also been improved to meet the increased needs, according to the governor’s office. The state says call center capacity has been increased and daily call center hours have been extended.

Florida will start accepting paper applications for unemployment benefits as a result of ongoing crashes and failures with its online system, Ken Lawson, the head of the state agency that processes claims, said Thursday.

Florida’s online system, CONNECT, went offline for hours Wednesday as the state dealt with an unprecedented surge of jobless claims. Florida had more than 222,000 claims last week.

Lawson, director of Florida’s Department of Economic Opportunity, announced the move at a town hall meeting with two Democratic legislators. He also apologized for the ongoing problems. The beginning of the town hall was disrupted by hackers and others who cursed at Lawson and the legislators.

The “next week or two” is going to be difficult, Lawson said.

Katy Murphy, Caitlin Emma, Shia Kapos, Joe Anuta,Gary Fineout and Katherine Landergan contributed to this report.

This article was originally published at Politico on April 2, 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.

Prior to joining POLITICO in August 2018, Rainey covered the Occupational Safety and Health administration and regulatory reform on Capitol Hill. Her work has been published by The Washington Post and the Associated Press, among other outlets.

Rainey holds a bachelor’s degree from the Philip Merrill College of Journalism at the University of Maryland.

She was born and raised on the eastern shore of Maryland and grew up 30 minutes from the beach. She loves to camp, hike and be by the water whenever she can.

About the Author: Nolan D. McCaskill is a national political reporter covering the 2020 presidential race.

He previously covered Congress and authored the Huddle newsletter at POLITICO, where he started as an inaugural member of POLITICO’s Journalism Institute in 2014 before accepting a yearlong fellowship through 2015, later becoming a breaking news reporter and briefly covering the White House.

Nolan is a December 2014 graduate of Florida A&M University in Tallahassee, Florida. He was editor-in-chief of his college newspaper, The Famuan, and a former producer for his university’s live television newscasts.

Nolan is PJI’s inaugural Emerging Communicator and a 2017-18 National Press Foundation Paul Miller Washington Reporting Fellow.


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Trump’s Labor Dept. Has Declared War on Tipped Workers

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In October, the Trump administration published a proposed rule regarding tips which, if finalized, will cost workers more than $700 million annually. It is yet another example of the Trump administration using the fine print of a proposal to attempt to push through a change that will transfer large amounts of money from workers to their employers. We also find that as employers ask tipped workers to do more nontipped work as a result of this rule, employment in nontipped food service occupations will decline by 5.3% and employment in tipped occupations will increase by 12.2%, resulting in 243,000 jobs shifting from being nontipped to being tipped. Given that back-of-the-house, nontipped jobs in restaurants are more likely to be held by people of color while tipped occupations are more likely to be held by white workers, this could reduce job opportunities for people of color.

Employers are not allowed to pocket workers’ tips—tips must remain with workers. But employers can legally “capture” some of workers’ tips by paying tipped workers less in base wages than their other workers. For example, the federal minimum wage is $7.25 an hour, but employers can pay tipped workers a “tipped minimum wage” of $2.13 an hour as long as employees’ base wage and the tips they receive over the course of a week are the equivalent of at least $7.25 per hour. All but seven states have a subminimum wage for tipped workers.

In a system like this, the more nontipped work that is done by tipped workers earning the subminimum wage, the more employers benefit. This is best illustrated with a simple example. Say a restaurant has two workers, one doing tipped work and one doing nontipped work, who both work 40 hours a week. The tipped worker is paid $2.50 an hour in base wages, but gets $10 an hour in tips on average, for a total of $12.50 an hour in total earnings. The nontipped worker is paid $7.50 an hour. In this scenario, the restaurant pays their workers a total of ($2.50+$7.50)*40 = $400 per week, and the workers take home a total of ($12.50+$7.50)*40 = $800 (with $400 of that coming from tips).

But suppose the restaurant makes both those workers tipped workers, with each doing half tipped work and half nontipped work. Then the restaurant pays them both $2.50 an hour, and they will each get $5 an hour in tips on average (since now they each spend half their time on nontipped work) for a total of $7.50 an hour in total earnings. In this scenario, the restaurant pays out a total of ($2.50+$2.50)*40 = $200 per week, and the workers take home a total of ($7.50 + $7.50)*40 = $600. The restaurant’s gain of $200 is the workers’ loss of $200, simply by having tipped workers spend time doing nontipped work.

To limit the amount of tips employers can capture in this way, the Department of Labor has always restricted the amount of time tipped workers can spend doing nontipped work if the employer is paying the subminimum wage. In particular, the department has said that if an employer pays the subminimum wage, workers can spend at most 20 % of their time doing nontipped work. This is known as the 80/20 rule: employers can only claim a “tip credit”—i.e., pay tipped workers a base wage less than the regular minimum wage—if tipped staff spend no more than 20 % of their time performing nontipped functions; at least 80 % of their time must be spent in tip-receiving activities.

The protection provided by this rule is critical for tipped worker. For example, in a restaurant, the 80/20 rule prevents employers from expecting servers to spend hours washing dishes at the end of the night, or prepping ingredients for hours before the restaurant opens. Occasionally, a server might play the role of the host, seating guests when a line has formed, or filling salt and pepper shakers when dining service has ended—but such activities cannot take up more than 20 % of their time without employers paying them the full minimum wage, regardless of tips.

The Department of Labor (DOL), under the Trump administration, has proposed to do away with the 80/20 rule. Workers would be left with a toothless protection in which employers would be allowed to take a tip credit “for any amount of time that an employee performs related, nontipped duties contemporaneously with his or her tipped duties, or for a reasonable time immediately before or after performing the tipped duties” (see page 53957 of the proposed rule).

With no meaningful limit on the amount of time tipped workers may perform nontipped work, employers could capture more of workers’ tips. It is not hard to imagine how employers of tipped workers might exploit this change in the regulation.

Consider a restaurant that employs a cleaning service to clean the restaurant each night: vacuuming carpets, dusting, etc. Why continue to pay for such a service, for which the cleaning staff would need to be paid at least the federal minimum wage of $7.25 per hour, when you could simply require servers to spend an extra hour or two performing such work and only pay them the tipped minimum wage of $2.13 per hour? Or, a restaurant that currently employs three dishwashers at a time might decide they can manage the dish load with only one dedicated dishwasher if they hire a couple extra servers and require all servers to wash dishes periodically over the course of their shifts. Employers could pay servers less than the minimum wage for hours of dishwashing so long as they perform some tipped work right before or after washing dishes.

The department recognizes that workers will lose out under this change, stating that “tipped workers might lose tipped income by spending more of their time performing duties where they are not earning tips, while still receiving cash wages of less than minimum wage” (see page 53972 of the proposed rule). Tellingly, DOL did not provide an estimate of the amount that workers will lose—even though it is legally required, as a part of the rulemaking process, to assess all quantifiable costs and benefits “to the fullest extent that these can be usefully estimated” (see Cost-Benefit and Other Analysis Requirements in the Rulemaking Process).

The department claims they “lack data to quantify this potential reduction in tips.” However, EPI easily produced a reasonable estimate using a methodology that is very much in the spirit of estimates the Department of Labor regularly produces; DOL obviously could have produced an estimate. But DOL couldn’t both produce a good faith estimate and maintain the fiction that getting rid of the 80/20 rule is about something other than employers being able to capture more of workers’ tips, so they opted to ignore this legally required step in the rulemaking process.

Below we describe the methodology for our estimate. The simplicity and reasonableness of this approach underscores that by not producing an estimate, the administration appears to simply be trying to hide its anti-worker agenda by claiming to not be able to quantify results.

Methodology for estimating tips captured by employers

The remainder of this piece describes the methodology for estimating the total pay transferred from workers to employers as a result of this rule described above. To evaluate how this rule change would affect pay, we use data from the Current Population Survey (CPS), restricted to states with a tip credit (i.e., that allow employers to pay a subminimum wage to tipped workers), to estimate how much employers might shift work from traditionally nontipped to tipped staff. Doing so would allow them to spread out the total pool of tips received over more people for whom employers can pay less than the minimum wage, thereby reducing employers’ wage responsibility. We then estimate the change in total earnings that would occur for food service workers if that shift in employment took place.

The CPS is a household survey that asks workers about their base wages (exclusive of tips) and about their tips earned, if any. One problem with the CPS data, however, is that earnings from tips are combined with both overtime pay and earnings from commissions. Researchers refer to the CPS variable that provides the aggregate weekly value of these three sources of earnings (overtime, tips, and commissions) as “OTTC.” In order to isolate tips using this variable, we first restrict the sample to hourly workers in tipped occupations, to help ensure that we are not picking up workers who are likely to earn commissions.

For hourly workers in these tipped occupations who work less than or equal to 40 hours in a week, we assume that the entire amount of OTTC earnings is tips. For hourly workers in tipped occupations who work more than 40 hours, we must subtract overtime earnings. We calculate overtime earnings for these workers as 1.5 times their straight-time hourly wage times the number of hours they work beyond 40. For these workers, we assume their tipped earnings are equal to OTTC minus these overtime earnings.

Some workers in tipped occupations do not report their tips in the OTTC variable; however, the CPS also asks workers to report their total weekly earnings inclusive of tips, and their base wage exclusive of tips. For those workers in tipped occupations with no reported value in the OTTC variable, but whose total weekly earnings is greater than the sum of their base wage times the hours they worked, we assume the difference is tips.

In other words, for hourly workers in tipped occupations we calculate tips in two ways:

1. For those who report a value for OTTC:

Weekly tips = OTTC for those who work ? 40 hours per week, and

Weekly tips = OTTC ? [(base wage) × 1.5 × (hours worked ? 40)] for those who work > 40 hours per week.

2. For those who do not report a value for OTTC:

Weekly tips = Total weekly earnings inclusive of tips – (base wage x hours worker).

In cases where tips can be calculated both ways, we take the larger of the two values.

Standard economic logic dictates that employers will spread out aggregate tips over as many workers they can—thereby reducing their wage obligations and effectively “capturing” tips. They will shift work from nontipped to tipped workers until the resulting average wage (combined base wage plus tips) of their tipped workers is at or just above the hourly wage these same workers could get in a nontipped job. For employers of tipped workers to get and keep the workers they need, tipped workers must earn as much as their “outside option,” since, all else being equal (i.e., assuming no important difference in nonwage compensation and working conditions), if these workers could earn more in another job, they would quit and go to that job. But for employers to keep these workers, they do not need to earn any more than they could earn in another job (again, assuming all else is equal), since as long as they are earning what they could earn in another job, it would not be worth it to these workers to quit.

To calculate the “outside option wage,” we use regression analysis to determine the wage each worker would likely earn in a nontipped job. We regress hourly wage (including tips) on controls for age, education, gender, race, ethnicity, citizenship, marital status, and state, and use the results of that regression to predict what each tipped worker would earn in a nontipped job. We set a lower bound on predicted hourly wages at the state minimum wage. We refer to the predicted value as the outside option wage—it’s the wage a similar worker in a nontipped job earns. We assume if a worker currently earns less than or equal to their outside option wage, their earnings cannot be reduced because if their earnings are reduced, they will leave their job and take their outside option.

However, if a worker currently earns more than their outside option wage, their earnings can be reduced by the amount the worker earns above the outside option wage, since as long as their earnings are not reduced below their outside option wage, they will have no reason to leave. We also assume that if their base wage is greater than the state minimum wage—i.e. if their employer is not taking the tip credit—their earnings will not be reduced, since the 80/20 rule applies only to tipped workers who are paid a subminimum base wage. We calculate new average tips earned as the aggregate tips of all tipped workers minus the aggregate amount, just described, by which their earnings can be reduced, divided by the total number of tipped workers.

Using this estimate of new average tips earned, we can estimate how much employers might shift the composition of employment by reducing the number of nontipped workers and adding more tipped ones. We assume that the total amount of tips earned remains the same— it is just spread out over more tipped workers (who are now doing more nontipped work). In particular, we assume that the new number of tipped workers is the number that, when multiplied by the new average tips earned, is equal to the total aggregate tips before the change.

We operationalize this by multiplying the sample weights of tipped workers by total aggregate tips divided by the difference between total aggregate tips and the aggregate amount by which earnings can be reduced. We then assume that the number of tipped workers added is offset one-for-one by a reduction in the number of nontipped workers who have food service occupations. We operationalize this by multiplying the sample weights of nontipped workers by one minus the ratio of the increase in tipped workers to the original number of nontipped workers. We find that employment in nontipped food service occupations will decline by 5.3% and employment in tipped occupations will increase by 12.1%, resulting in 243,000 jobs shifting from being nontipped to being tipped as a result of this rule. The work that had been done by those nontipped workers will now be done by tipped workers, with tipped workers spending less time doing work for which they receive tips.

The loss in pay is calculated as the difference between current aggregate food service tips and new aggregate food service tips using the new employment weights just described for tipped and nontipped workers and the new average wages for tipped workers. We assume average wages for nontipped workers do not change. We estimate that there will be a transfer of $705 million from workers to employers if this rule is finalized.

Finally, it should be noted that our estimate of the transfer from workers to employers is likely a vast underestimate for three reasons. First, tips are widely known to be substantially underestimated in CPS data, thus it is highly likely that we are underestimating the amount of tips employers would capture as a result of this rule change. For example, we find that 47.6% of workers in tipped occupations do not report receiving tips. Similarly, using revenue data from the full-service restaurant industry and updating the methodology from Table 1 here to 2018, we find that tips in full-service restaurants are $30.5 billion, which is roughly twice the amount of tips reported in food service in the CPS. This means the amount employers will really capture is likely roughly twice as large as our estimate.

Second, we only estimated losses in food service. However, about 26.0 % of tips earned in the economy are not earned in restaurants or food service occupations. Combining these two factors together means what employers will really capture may be 2.5 times as large as our estimate. Third, our estimates assume that getting rid of the 80/20 rule will only have an effect if the employer is already taking a tip credit. This ignores the fact that some employers may be incentivized to start using the tip credit if the 80/20 rule is abolished, knowing that without the rule they will be able to capture more tips. Accounting for this factor would increase our estimate further.

The piece was also published at the Economic Policy Institute’s Working Economics Blog.

This article was originally published at In These Times on December 3, 2019. Reprinted with permission.

About the Author: Heidi Shierholz is Senior Economist and Director of Policy at the Economic Policy Institute. From 2014 to 2017, she served the Obama administration as chief economist at the Department of
Labor.
About the Author: David Cooper is a Senior Economic Analyst at the Economic Policy Institute.

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Labor Department tells senators it’s too ‘complex’ to collect sexual harassment data

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The Labor Department told Democratic senators that it can’t collect data on sexual harassment in the workplace because it would be “complex and costly.” On Monday, Democratic senators dismissed that justification.

In January, 22 Democratic senators sent a letter to labor department officials requesting the department act on studying sexual harassment. Sen. Kirsten Gillibrand (D-NY) signed the letter and Sens. Kamala Harris (D-CA) Elizabeth Warren (D-MA), Bernie Sanders (I-VT), and others co-signed the letter, according toBuzzFeed.

Referring to the #MeToo movement, the letter noted that “there has not been an exact accounting of the extent of this discrimination and the magnitude of its economic costs on the labor force. We therefore request your agencies work to collect this data.”

CNN was the first to obtain the Labor Department’s response, which was addressed to Gillibrand. The department’s letter read, “There are a number of steps involved in any new data collection, including consultation with experts, cognitive testing, data collection training, and test collection. Once test collection is successful, there is an extensive clearance process before data collection can begin.”

The department went on to say that employers would have difficulty providing the information they’re requesting and that requesting additional information for the Bureau of Labor Statistics survey “may have detrimental effects on survey response.”

The letter mentions “alternative sources of information on sexual harassment,” such as the Bureau of Justice Statistics’ National Crime Victimization Survey, but senators sent a letter in response that essentially balked at that recommendation.

“…the Department is surely aware that not all sexual harassment rises to the level of a violent criminal act and therefore would not be captured by this survey,” the letter read.

Senators called the justifications for declining to work on the issue “wholly inadequate” and wrote that since they “hope that the Department would always consider rigorous methods inherent in data collection,” the department’s mention of its complexity should not justify the decision to not study sexual harassment. Senators also mentioned that the U.S. Merit Systems Protection Board did this type of data collection and analysis in the ’80s and that “Surely the government’s capacity to collect this data has only become more sophisticated over the past several decades.”

Senators from both parties asked the labor secretary to take some kind of action on sexual harassment at an April Senate panel on the budget. According to Bloomberg, at the time, Labor Secretary Alexander Acosta “expressed willingness to act.”

Many researchers have looked at the economic cost to harassed women themselves. Heather McLaughlin, an assistant professor of sociology at Oklahoma State University, has studied the career effects of sexual harassment and found that a lot of the women who quit jobs because of sexual harassment changed careers and chose fields where they expected less harassment. But that meant that some of those fields were female-dominated, and many female-dominated fields pay less. Some women were more interested in working by themselves after the harassment.

” … but certainly they’re being shuffled into fields that are associated with lower pay because of the harassment,” McLaughlin told Marketplace.

People who have been harassed also experience effects on their physical and mental health, such as anxiety, depression, and post-traumatic stress disorder. Victims of sexual harassment can also experience headaches, muscle aches, and high blood pressure.

Fifty-four percent of U.S. women said they received inappropriate and unwanted sexual advances from men, with 23 percent saying those advances came from men who had influence over their careers and 30 percent coming from male co-workers, according to a 2017 ABC News/Washington Post poll.

“Right now, we don’t know how many gifted workers and innovators were unable to contribute to our country because they were forced to choose between working in a harassment-free workplace and their career,” Gillibrand wrote in her January letter to the department.

This article was originally published at ThinkProgress on May 2, 2018. Reprinted with permission.

About the Author: Casey Quinlan is a policy reporter at ThinkProgress covering economic policy and civil rights issues. Her work has been published in The Establishment, The Atlantic, The Crime Report, and City Limits.


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Trump Administration Should Rescind Proposal That Allows Bosses to Pocket Working People’s Tips

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As we previously reported, President Donald Trump’s Labor Secretary Alexander Acosta announced a new proposed regulation to allow restaurant owners to pocket the tips of millions of tipped workers. This would result in an estimated $5.8 billion in lost wages for workers each year?wages that they rightfully earned.

And most of that would come from women’s pockets. Nearly 70% of tipped workers are women, and a majority of them work in the restaurant industry, which suffers from some of the highest rates of sexual harassment in the entire labor market. This rule would exacerbate sexual harassment because workers will now depend on the whims of owners to get their tips back.

In a letter to Congress, the AFL-CIO opposed the rule change in the strongest possible terms, calling for the proposal to be rescinded:

Just days before the comment period for this [Notice of Proposed Rulemaking] closed, an extremely disturbing report appeared indicating that analysis of the costs and benefits in fact occurred, but was discarded. On Feb. 1, 2018, Bloomberg/BNA reported that the Department of Labor “scrubbed an unfavorable internal analysis from a new tip pooling proposal, shielding the public from estimates that potentially billions of dollars in gratuities could be transferred from workers to their employer.” Assuming these reports are correct, the Department of Labor should immediately make the underlying data (and the analyses that the Department conducted) available to the public. We call on the Department of Labor to do so immediately and to withdraw the related Notice of Proposed Rulemaking.

The AFL-CIO strongly urges the Department to withdraw the proposed rule, and instead focus its energies on promoting policies that will improve economic security for people working in low-wage jobs and empower all working people with the resources they need to combat sexual harassment in their workplaces.

The Department of Labor must provide an estimate of its proposed rules’ economic impact. However, while suspiciously claiming that such an analysis was impossible, it turns out that this wasn’t true:

Senior department political officials—faced with a government analysis showing that workers could lose billions of dollars in tips as a result of the proposal—ordered staff to revise the data methodology to lessen the expected impact, several of the sources said. Although later calculations showed progressively reduced tip losses, Labor Secretary Alexander Acosta and his team are said to have still been uncomfortable with including the data in the proposal. The officials disagreed with assumptions in the analysis that employers would retain their employees’ gratuities, rather than redistribute the money to other hourly workers. They wound up receiving approval from the White House to publish a proposal Dec. 5 that removed the economic transfer data altogether, the sources said.

The move to drop the analysis means workers, businesses, advocacy groups and others who want to weigh in on the tip pool proposal will have to do so without seeing the government’s estimate first.

Democrats in Congress quickly responded that the rule change should be abandoned, as the new rule would authorize employers to engage in wage theft against their workers. Sen. Elizabeth Warren (D-Mass.) said:

You have been a proponent of more transparency and economic analysis in the rulemaking process. But if DOL hid a key economic analysis of this proposed rule—and if [Office of Management and Budget] officials were aware of and complicit in doing so—that would raise serious questions about the integrity of the rule itself, and about your role and the role of other OMB officials in the rulemaking.

Take action today and send a letter to Congress asking it to stop Trump’s tip theft rule.

This blog was originally published at AFL-CIO on February 15, 2018. Reprinted with permission. 

About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist. Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.


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22 Democratic senators want to know how sexual harassment financially impacts women

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Twenty-two Democratic senators are calling on the Labor Department to collect additional, better data regarding sexual harassment in the workplace.

The senators sent a letter to the department, signed by Sen. Kristen Gillibrand and co-signed by Sens. Elizabeth Warren (D-MA), Kamala Harris (D-CA), Cory Booker (D-NJ), and Bernie Sanders (I-VT), among others. Not a single Republican senator attached their name to the letter.

“What is known is that harassment is not confined to industry or one group. It affects minimum-wage fast-food workers, middle-class workers at car manufacturing plants, and white-collar workers in finance and law, among many others,” the senators wrote in the letter, provided to Buzzfeed. “No matter the place or source, harassment has a tangible and negative economic effect on individuals’ lifetime income and retirement, and its pervasiveness damages the economy as a whole.”

The Equal Employment Opportunity Commission reports that anywhere from 25 percent to 85 percent of women report having been sexual harassed in the workplace. An ABC News-Washington Post poll taken shortly after the New York Times bombshell report on Harvey Weinstein found that 33 million U.S. women, or roughly 33 percent of female workers in the country, have experienced unwanted sexual advances from male co-workers. Among those women who have been sexually harassed in the workplace, nearly all, 95 percent, say their male harassers typically go unpunished.

What this data doesn’t reveal, however, are the financial and personal costs of sexual harassment that women endure — and that’s exactly what these senators are in search of.

Workplace harassment has physical and psychological consequences, including depression and anxiety. These consequences can manifest themselves in missed workdays and reduced productivity, in addition to decreased self-esteem and loss of self-worth in the workplace.

In the restaurant industry, where 90 percent of female workers have experienced sexual harassment, more than half of these women endured the behavior, by both customers and co-workers, because they relied on the money. The Gillibrand letter describes these women as being “financially coerced” into enduring toxic workplace environments.

Sexual harassment in the workplace often forces female victims to leave their jobs to avoid continuing to experience the harassment. This frequently occurs in science, technology, and engineering fields, rather than low-wage service jobs.

According to data collected by sociologist Heather McLaughlin and others, about 80 percent of women who’ve been harassed leave their jobs within two years.

This call-to-action from Congress comes at time when the governing body is still trying to grapple with its own sexual harassment problem. As recently as this week, Sen. Marco Rubio (R-FL) flew to Washington D.C. from Florida to fire his chief of staff over sexual misconduct allegations.

Lawmakers in the House of Representatives unveiled bipartisan legislation last week to overhaul sexual harassment policies on Capitol Hill. The policy, as it stands now, overwhelmingly protects the harasser.

The new legislation also includes language that bars lawmakers from using taxpayer funds for settlements. As was first reported by the New York Times, Rep. Patrick Meehan (R-PA) used taxpayer money to settle a complaint from a former staffer. Rep. Blake Farenthold (R-TX) similarly confessed he agreed to an $84,000 settlement after a former aid accused him of sexual harassment. Farenthold as allegedly pledged to take out a personal loan to pay back the $84,000 dollars.

According to a GOP aide familiar with how the House sexual harassment legislation was crafted, Farenthold’s case led to the inclusion of a provision that would prevent the Office of Congressional Ethics (OCE) from reviewing complaints. Instead, complaints would automatically be referred to the House Ethics Committee, bypassing the agency in an effort to streamline the process.

The OCE reviewed complaints against Farenthold in 2015 but concluded there was not substantial reason to believe he sexually harassed his staffer.

This article was originally published at ThinkProgress on January 29, 2018. Reprinted with permission.

About the Author: Rebekah Entralgo is a reporter at ThinkProgress. Previously she was a news assistant and social media coordinator at NPR, where she covered presidential conflicts of interest and ethics coverage. Before moving to Washington, she was an intern reporter at NPR member stations WLRN in Miami and WFSU in Tallahassee, Florida. She holds a B.A in Editing, Writing, and Media with a minor in political science from Florida State University.


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