Workplace Fairness

Menu

Skip to main content

  • print
  • decrease text sizeincrease text size
    text

America’s economic pain arrives on K Street

Share this post

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.


Share this post

Save the Seventh

Share this post

Susan HarleyThe Seventh Amendment to the United States Constitution states, “In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved …”

Even though we are all granted the right to a trial by jury in the U.S. Constitution, Big Banks and corporations regularly use fine print in contracts to trick consumers out of their right to a day in court. Forced arbitration means that if consumers are ripped off or otherwise harmed, they must use private arbitration proceedings to air their grievances.

If you’re already angry about forced arbitration and you want to do something to get these predatory terms out of financial products, skip to the end of this post for ways to get involved.

There’s plenty to be mad about. These expensive arbitration “tribunals” have no judge or jury. They are overseen by paid arbitration providers who are selected by the companies. Arbitration firms have a very good reason to guarantee repeat business for themselves by finding in favor of the corporations over the consumers. The findings of arbitration decisions are not public and the appeals process is very limited. Most likely, you will also be required to go to arbitration in another state!

If consumers were interested in choosing arbitration, they would enter into the decision after some harm has come to them. It would need to be an informed decision where they did so with a full understanding of the consequences of their choice to not go to court.

But that’s not how we’re all roped into signing (or even clicking) away our rights. It has been proven that consumers rarely understand that their contracts contain arbitration clauses and have little idea of the repercussions of having their complaints heard in a non-court venue.

And, even if you understood they were there and knew it meant you were losing your right to go to court, it’s not like your average adult can simply opt out of getting a checking account, taking out that student loan, or financing that car.

What about if those very same companies with arbitration clauses were systematically ripping off you and your fellow consumers – but only in small dollar amounts? The only way it makes sense for consumers to bring those cases is through class actions where those who have been harmed can band together to make a complaint about a company’s action. Makes sense, right? Except most arbitration clauses contain class action bans, which were unfortunately upheld by the U.S. Supreme Court in 2011. Now Big Banks basically have free rein to steal a few dollars here and there from all of their customers without worry of being held accountable.

Congress saw the unfairness of forced arbitration clauses and prohibited them in certain industries and in housing-lending contracts via the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Dodd-Frank tasked the Consumer Financial Protection Bureau (CFPB) — the brainchild of Elizabeth Warren — that was created by the same legislation with studying arbitration in all consumer financial contracts and determining whether consumers would be better served by prohibiting the practice.

The CFPB’s study is finally complete. It shows that consumers have little idea about arbitration clauses and how the fine print strips them of their constitutional right to their day in court. In fact, three out of four consumers surveyed as part of the study did not know whether they had an arbitration clause in their credit card agreements. And, of those who did have arbitration clauses, only seven percent understood that meant they had given up their right to their day in court.

Now it’s time for the public to get involved. Every person who’s even been steaming mad at Wall Street’s sticking it to the little guy and thinking they can weasel out of being held accountable needs to get involved.

Urge the CFPB to stand up to Big Banks and do the right thing. It’s certain that the U.S. Chamber of Commerce and its corporate cronies will do everything it can to keep unfair forced arbitration in consumer financial products, so we need as many people as possible to join this fight. There’s a whole toolbox of tactics we’d love to get you involved with, and it only depends on how much time you have to invest in protecting consumers.

Only have a second or two to take an online action? Easy!

What about a minute to share this social media meme? Great! While you’re at it, Tweet with the hashtags #CFPB and #ForcedArbitration.

If you have a lot to say on the subject and want to get your community fired up too, write a letter to the editor. We have ideas on what to say! There are even more ways to get involved. If you want to learn more, email: [email protected].

You could be part of scoring a major win for our country by reclaiming the Seventh Amendment. Americans, take back your day in court!

About the Author: Susan Harley is the deputy director of Public Citizen’s Congress Watch division.


Share this post

Corporate Rewards: Controlling U.S. Trade Policy

Share this post

Leo GerardReal men, real human beings, with feelings and families, fought and died at Gettysburg to preserve the Union, to ensure, as their president, Abraham Lincoln, would say later, that “government of the people, by the people, for the people, shall not perish from the earth.”

Perversely, afterwards, non-humans commandeered the constitutional amendment intended to protect the rights of former slaves. Corporations wrested from the U.S. Supreme Court a decision based on the 14th Amendment asserting that corporations are people with rights to be upheld by the government – but with no counterbalancing human responsibilities to the republic. No duty to fight or die in war, for example. Earlier this year, the Supreme Court expanded those rights – ruling that corporations have a First Amendment free speech right to surreptitiously spend unlimited money on political campaigns.

Today, Lincoln would have to say America’s got a government of the people by the corporations, for the corporations.

The proposed trade agreement with South Korea illustrates corporate control of government for profit. It’s the same with efforts to revive the moribund trade schemes former President George W. Bush also negotiated with Panama and Colombia, the world’s most dangerous country by far for trade unionists, with 2,700 assassinated with impunity in the past two decades, 38 slain so far this year.

Nobody likes these trade deals – except corporations. They’re all modeled on the North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement (CAFTA), both of which killed American jobs while giving corporations new authority to sue governments (read: taxpayers) for regulations – like environmental standards – that corporations contend interfere with their right to make money.

The Economic Policy Institute estimates that the South Korea so-called Free Trade Agreement (FTA) would cost America 159,000 jobs and enlarge its trade deficit by $16.7 billion in its first seven years.

Americans, now suffering though corporate-caused 9.6 percent unemployment, know a deal when they see one – and the South Korea FTA is not one. In a September poll by NBC News and the Wall Street Journal, 53 percent of Americans said so-called free trade agreements have injured the country. Only 17 percent said those trade schemes benefited the United States. Disgust with these deals spans party lines, including Tea Partiers, 61 percent of whom said they’re bad for America.

Many politicians, particularly Democrats, abhor the schemes as well. In July, just after President Obama announced that he would try to get the South Korea pact passed, 110 House Democrats described their disdain for the deal:

“We oppose specific provisions of the agreement in the financial services, investment, and labor chapters, because they benefit multi-national corporations at the expense of small businesses and workers.”

In addition, during this fall’s midterm election campaign, 205 candidates, Republican and Democrat, ran on platforms condemning job off-shoring and unfair trade, and house Democrats who ran on fair trade were three times as likely to survive the GOP “shellacking” as Democrats who supported so-called free trade schemes.

Significantly, the South Korean public and some South Korean politicians also oppose the trade proposal. In the week leading up to the G-20 meetings in Seoul, trade unionists, farmers, peasants and students filled the streets in marches and candle light vigils to express outrage with the proposed agreement, including its provisions giving U.S. corporations the right to challenge South Korean laws in private tribunals.

In October, 35 South Korean lawmakers joined 20 U.S. Representatives in writing President Obama and Korean President Lee Myunk-bak to protest the proposal.

Despite all that opposition, when Obama and Lee emerged from talks without an agreement, the American press, pundits and “analysts on both sides of the aisle,” described the situation as a major diplomacy failure, “a serious setback for the president.”

They were wrong. It wasn’t a setback for Obama. It was the president refusing to sign a bad deal for American workers.

It was, however, a humiliation for the U.S. Chamber of Commerce, which just spent at least $50 million from secret corporate donors to elect Republicans who will do its bidding. The South Korea deal is a priority for the Chamber. Here’s what Chamber senior vice president for international affairs Myron Brilliant told the New York Times after the South Korean negotiations broke down and Obama pledged to attempt to complete the deal over the following six weeks:

“This will be an early test for this president with the new Congress, particularly the House leadership.”

The “Brilliant” test is whether the president of the United States will comply with Chamber demands to complete trade deals that kill jobs and that Americans despise.

When Obama went to Seoul, Chamber President Thomas J. Donohue was there to, as he put it, help win the trade deal. He also was among 120 executives given exclusive access to international leaders including German Chancellor Angela Merkel and Russian President Dmitri A. Medvedev in a conference before the G-20 meeting.

The international organizers didn’t invite to the trade talks or the conference the students, farmers, environmental groups, organized labor and untold millions of individuals who oppose the so-called free trade deals. The human beings who will be hurt most by the trade deals didn’t get a seat at the table. The corporate-people who stand to gain everything did.

Brilliant’s comments express the corporate sense of entitlement. They spent tens of millions to get what they wanted from politicians to increase profits. Now they expect it to be delivered. It’s their recompense, their corporate reward.

If fatter profits mean fewer American jobs and wider trade deficits, that’s simply not a problem for corporations. That’s among the perks corporations got when the Supreme Court awarded them the privileges of personhood in America but none of the pesky personal and patriotic responsibilities of actual people in American society.

About The Author: Leo Gerard is the United Steelworkers International President. Under his leadership, the USW joined with Unite -the biggest union in the UK and Republic of Ireland – to create Workers Uniting, the first global union. He has also helped pass legislation, including the landmark Canadian Westray Bill, making corporations criminally liable when they kill or seriously injure their employees or members of the public.


Share this post

Survey: Small Business Owners Say Unions Good for Business

Share this post

Image: James ParksDespite U.S. Chamber of Commerce propaganda, the nation’s small business owners recognize the value of employees forming a union, according to a new survey by Americans Rights at Work (ARAW). The survey was released yesterday, the same day the Chamber opened its annual small business summit.

Some 80 percent of the small business owners and self-employed individuals surveyed agreed that “strong unions make the free market system stronger.” A significant majority—54 percent—strongly agreed.

ARAW Executive Director Kimberly Freeman Brown says:

We are learning that small business owners across America support the rights of employees to organize unions, believing not only that it makes good business sense, but also that strong unions make the free market system stronger.

A full 69 percent of the respondents said it was very important to their businesses that “Congress enact legislation that rewards responsible employers who respect their workers’ right to join a union.”

Brown added:

Small business leaders are showing us that there is a path to a “win-win” economy in America. Employers and workers can both generate success and share in the rewards of their hard work together.

The online survey included 1,055 respondents who identify themselves as small business owners or self-employed individuals. Click here to read the full results of the survey, “Surveying the Small Business Owner: The Value of Unions In America.”

Among other results, the survey found:

  • Some 52 percent of small business owners express strong concern that “unions have been weakened so much that our economy has actually been hurt.”
  • Nearly three out of five—58 percent—strongly agreed that “labor unions are necessary to protect the working person.”
  • A huge 72 percent strongly agreed that “a good business person can make a profit and respect their workers’ choice to form a union.”

As one politically independent small business owner in Virginia said:

When workers form unions, they can secure benefits and rights in the workplace, including a decent wage and health care. They have economic and job stability. Unions lift workers and workers lift the economy. It’s as simple as that.

*This post originally appeared in AFL-CIO blog on May 18, 2010. Reprinted with permission.

About the Author: James Parks had his first encounter with unions at Gannett’s newspaper in Cincinnati when his colleagues in the newsroom tried to organize a unit of The Newspaper Guild. He saw firsthand how companies pull out all the stops to prevent workers from forming a union. He is a journalist by trade, and worked for newspapers in five different states before joining the AFL-CIO staff in 1990. He has also been a seminary student, drug counselor, community organizer, event planner, adjunct college professor and county bureaucrat. His proudest career moment, though, was when he served, along with other union members and staff, as an official observer for South Africa’s first multiracial elections. Author photo by Joe Kekeris.


Share this post

Follow this Blog

Subscribe via RSS Subscribe via RSS

Or, enter your address to follow via email:

Recent Posts

Forbes Best of the Web, Summer 2004
A Forbes "Best of the Web" Blog

Archives

  • Tracking image for JustAnswer widget
  • Find an Employment Lawyer

  • Support Workplace Fairness

 
 

Find an Employment Attorney

The Workplace Fairness Attorney Directory features lawyers from across the United States who primarily represent workers in employment cases. Please note that Workplace Fairness does not operate a lawyer referral service and does not provide legal advice, and that Workplace Fairness is not responsible for any advice that you receive from anyone, attorney or non-attorney, you may contact from this site.