Working for Free Is a Valuable Option to Unemployment

Finding a job isn’t easy these days. We all know that.

The Bureau of Labor Statistics shows the unemployment rate for May was 7.6 percent — a figure virtually unchanged from the previous three months. But it’s an improvement from the 8.2 percent of Americans who were without a paycheck during the same period in 2012.

Despite that progress, there are roughly 11.8 million persons above the age of 16 currently looking for work,  unable to find a job within a month and possibly drowning in debt.

You can enroll in graduate school, but that involves paying tuition when you might not be in a position to incur more higher-education bills or student loan debt. Also, graduate school might be unnecessary to your job prospects. The easier alternative is doing nothing, but that can hurt your chances of employment and possibly bring on bouts of depression.

If you find yourself without a job and your search is taking you nowhere, here are three reasons why you should consider working for free to make yourself a better job candidate:

Long-Term Unemployment Hurts You

Whether you’re six months out of school with no work experience or lost your job and haven’t found work, most employers won’t look at applications or resumes of the long-term unemployed.

A 2012 study done by Rand Ghayad, a doctorate candidate in economics at Northeastern University, suggests that companies would rather hire someone with little to no relevant experience who has been unemployed for a few months over someone with more relevant experience who has been unemployed for longer than six months.

In addition to the negative effects on your job prospects, there are also serious health consequences related to long-term unemployment, according to the April study “Long-Term Unemployment: Consequences and Solutions,” by the American Enterprise Institute for Public Policy Research.

That study shows increased risk of death and shortened life expectancies for those who have experienced more than six months of unemployment. Men in that category are especially susceptible to lung cancer. These problems are especially burdensome if you have high medical bills or lack of health insurance.

Unemployment can have severe effects on your family, too. If you’re a parent, unemployment increases the risk of your child repeating a grade in school. A long period of unemployment also increases the probability of divorce.

Rebuild a Career Without Risk

Whether you quit your job or lost it, or haven’t had the opportunity to working again, your career path may need some adjustment. You might have to update your skill set if it doesn’t fit the job market.

Finding an unpaid internship or volunteer position can help you experiment with a few different industries, positions or companies with no real restrictions or obligations. You are free to test the waters as you please.

While a series of lawsuits against unpaid internships have muddied those waters, they shouldn’t all be discouraged, especially in a tight job market.

Shadowing a top executive or a manager in a specific department won’t cost you anything. Sitting in a lecture hall with 299 other students or listening to a professor lecture from PowerPoint slides might cost about $360 per credit hour.

You’ll learn the industry and what it takes to succeed at the position you want. You’ll be able to identify your skills and then see how they match up to the company and field.

That could save you a long investment of grad school and false pretenses.

You’ll learn how to establish your skill set so you can market them to the executives and corporate world, and you won’t have to pay nearly as much as an undergrad or graduate student would.

Network and Learn

Volunteers and interns, paid or unpaid, usually meet the CEO, president or vice president of the company or organization at which they work.

Getting to know the top people at a company and those who make the hiring decisions is a benefit you have as an intern over those who are applying through the normal channels.

Working an unpaid internship also shows dedication to work rather than getting paid by the company and that goes a long way when judging someone’s character during the hiring process.

Even if the VP of the company doesn’t approach you with a job offer, you’ll have more experience to add onto your resume — at no cost to you — bringing you closer to the job you want than the person who’s still looking for work and doing nothing.

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Women Rise as Primary Breadwinners, Some Still Face Challenges

College-educated women are catching up with men in the workforce, but many other women, especially single mothers, are facing great financial challenges, a new report shows.

The Pew Research Center this week issued a report, titled “Breadwinner Moms,” that shows 40 percent of all households with children under the age of 18 are headed by mothers who are either the sole or primary income generator for the family. That’s a record spike from 1960 when women’s share was just 11 percent.

A total of 5.1 million of these women are married moms who earn higher incomes than their husbands and the majority — about 8.6 million — are single mothers, the study shows.

While the results from the Pew report are good news for married, college-educated women, who shared a total family income of nearly $80,000 in 2011 (generously above the national median of $57,100 for all families with children), the findings also showed that mothers raising children on their own earned a median income of about $23,000.

To put this in perspective, the 2011 poverty guideline for a single mom with two children was $18,530 in most states, which leaves 8.6 million single mothers in a difficult financial place that could worsen if they become unemployed and take on greater debt.

Women and Bankruptcy

Today, women make up nearly half the U.S. labor force; a drastic improvement from the 1960’s when women comprised a little over one-tenth of the work force. This increase in employment may be what is keeping women from falling into the kind of debt that can only be resolved with bankruptcy.

Bankruptcy will take a toll on your credit and the ability to use your money in the future. It plays havoc on your property, too, possibly preventing or delaying foreclosure on a home and repossession of a car.

A report issued in 2011 by the Institute of Financial Literacy, titled “A Five Year Perspective of the American Debtor,” shows the gap between women and men who filed for bankruptcy is shrinking.

That study indicates that in 2010, 52.26 percent of bankruptcy filers were women and 47.74 percent were men — that’s a 4.52 percentage point difference. It’s a sharp contrast to the 7.2 percentage point difference between the two sexes in 2006 bankruptcy reports.

There is a lack of current research showing why those figures followed that pattern or if they are continuing to decrease for women and increase for men; however, that report’s authors suggest that this closing gap could be a reflection of the U.S. population at that time. Women accounted for 50.8 percent of the population and men represented 49.2 percent of all U.S. residents in 2010.

The narrowing gap might also be a result of more women entering the workforce and avoiding the kinds of pitfalls that land them in bankruptcy court.

Some of these women might be finding alternatives to bankruptcy like debt consolidation or debt settlement.

Income Disparities in the Workforce

While men still account for the majority of the workforce, single and married mothers are stepping out of their homes to make a 13.7-million person dent, about 47 percent, in the workplace.

Despite closing the gap in the workforce, working women are making significantly less than their male counterparts. In 2011 the median annual earnings for women working full time, year-round was $37, 118. For men, the average earnings were $48,202. If you examine the gender gap in pay over a lifetime, women make $434,000 less than men, according to a fact sheet from the Democratic Policy and Communications Center.

Unfortunately, unequal pay may begin right at the start of your career. Just as they enter the work force, women are earning 7 percent less in their first year than their male peers, according to research from the American Association of University Women (AAUW).  The men and women in this study came from similar backgrounds and held similar jobs, but did not receive equal pay.

That difference suggests that gender discrimination remains a significant problem in the workforce. Unfortunately, the Senate did not pass suggested legislation in June of 2012, which was intended to prevent this type of discrimination.

The Paycheck Fairness Act would have legally required employers to be able to prove that salary differences between men and women doing the same work were not gender-related. If the act had passed, it might have brought us one step closer to avoiding debt and bankruptcy, but a 52-47 vote opposing the bill ended the discussion for now.

Making this inequity all the more distressing is the fact that this first year of employment is a crucial time, setting the standard for a future salary and potential raises. Additionally, many graduates must take the first fruits of their earnings to begin paying off student loans.

Yet, for every dollar men are earning, women earn 93 cents.

This AAUW study also accounts for the factor of choice, regarding how women pick majors, decide what field to work in and how many hours they will work. Previous studies that did not account for the choice factor found that women were earning 18 percent less than men.

The gender gap may be diminishing—revealing that women are taking financial steps in the right direction—but still have their work cut out for them if they hope to be paid their real worth.

Some Employers Believe a Poor Credit Score Indicates Poor Work Habits

Looking for a job isn’t fun, even in the best of times. It’s a lot worse in the worst of times — times like these.

While the national unemployment rate has fallen to its current 7.7 percent level — from a high of 10 percent at the nadir of the Great Recession — finding a job is still an overwhelming challenge for 12 million out-of-work Americans.

And present-day job seekers are carrying an extra – some say unfair – burden: their credit histories.

Using Credit Checks as Job Screens

Today, it is common for employers to look at an applicant’s credit report before making a hiring decision. In fact, based on a survey of 400 employers conducted by the Society for Human Resources Management, approximately 47 percent of employers do credit checks on some or all of their job applicants.

And credit checks are entirely legal. The federal Fair Credit Reporting Act permits employers to request credit reports on all job applicants and existing employees after receiving written permission from the person whose report they seek to review — and they can reject an applicant who refuses to give that permission.

Advocates of using credit scores as a measure of an individual’s fitness for employment maintain that they are valid screening tools that give an employer an insight into an applicant’s character. A poor credit score, it is argued, suggests the possibility of poor work habits or a disregard for making good on commitments.

But critics of the practice respond that credit ratings were never designed to do anything other than give lenders a means to evaluate whether a potential borrower would be a good credit risk; based on someone’s history of paying debts, a lender decides whether or not to make a loan, and if so, on what terms. They were not intended to evaluate a person’s qualifications for a job or his or her ability to succeed at one.

And while many people have recovered from the recession and seen their credit scores recover, the portion of the population with poor ratings, i.e. credit scores under 600, has grown from about 15 percent before the crash to about 25 percent in 2011. That means that today, there are millions more Americans whose degraded credit score may be undermining their chances to find employment.

What Credit Reports Actually Show

And yet, an unbiased look at credit reports suggests that they are really better at showing the results of a staggering economy than they are at highlighting undesirable work behaviors.

In fact, according to a new study of nearly 1,000 low- and middle-income families by the research and policy group Demos, most of those surveyed who suffered declining credit ratings during the past few years had either lost a job, incurred debt when they or a family member got injured or sick (especially if they lacked health insurance), or were supporting one or more minor children.

Not surprisingly, when any or all of the above situations occur, the likelihood of being in debt increases.

According to the Demos study: 31 percent of households who have had a member out of work for two months or longer in the past three years, reported that their credit score had declined over the same period of time; households that include someone without health coverage were twice as likely to report declined credit scores; and 23 percent of indebted households raising children described their credit scores as poor, compared with 12 percent of indebted households without kids.

So, ironically, the people who may be most in need of employment are precisely those who have been victimized the most by forces outside of their control: job loss, sickness and family responsibilities. But now their credit reports are also being used as weapons against them, further punishing them by keeping them unemployed.

The Catch-22 is unmistakable: A large number of job seekers are unable to secure work because of damaged credit, yet are unable to escape debt and improve their credit because they cannot find work. One in seven respondents in the Demos study who have poor credit say that they were told they would not be hired for a job because of information in their credit report.

Changing the System

Critics of the present system offer several possible remedies. Because, as the Demos study also showed, African-American families were the hardest hit by the country’s economic woes, and thus have suffered disproportionally from declining credit scores, the Equal Employment Opportunity Commission could seek to ban the practice, outright, on discriminatory grounds.

Or more states can join California, Hawaii, Washington, Oregon, Illinois, Maryland and Connecticut in passing legislation that limits the use of consumer credit reports in connection with hiring and personnel decisions.

Or Congress can enact federal legislation that plainly states that, except in clearly defined circumstances, no one should be denied work based solely upon their credit score. Currently, a law to do just that, H.R. 645, the Equal Employment Act for All, sponsored by Congressman Steve Cohen, D-Tenn., is being considered by the House Financial Services Committee.

But its chances of passing are poor. Between 2011-2013, only 11 percent of all House bills made it past committee, and only 3 percent were enacted into law.

So much for Washington’s oft-stated desire to “put Americans back to work.”

Eurozone Unemployment Rate Hits Historic High of 12 Percent

The longest unemployment lines in the history of the European Union are choking that continent’s economic recovery, but have had no noticeable effect in the United States.

February unemployment reached a record-setting 12 percent in the 17 European Union countries that use the euro, with Greece (26.4 percent unemployment) and Spain (26.3) continuing to be a drag on the rest of the continent.

In the United States, February unemployment dropped to 7.7 percent (from 7.9 percent), the lowest level since December 2008. The U.S. economy added 236,000 jobs in February, and unemployment rates dropped in 22 states.

The U.S. Bureau of Labor Statistics will release its March unemployment numbers on April 5.

Youth Unemployment Soaring

Europe, meanwhile, is still trying to get some positive momentum going among its diverse economies. There are now 19.07 million people out of work, 1.8 million more than were unemployed in February 2012.

“Such unacceptably high levels of unemployment are a tragedy for Europe,” EU Employment Commissioner Laszlo Andor said in a press release. “The EU has to mobilize all available resources to create jobs … young people in particular need help.”

Europe’s youth, defined as those younger than 25, have an unemployment rate of 23.9 percent. The Spanish youth rate is an astounding 55.7 percent, while Portugal’s was 38.2 percent and Italy’s 37.8 percent.  Almost 3.6 million young people were unemployed in the eurozone in February, an increase of 188,000 from February 2012.

Could it Get Worse?

Making matters worse, the February unemployment figures do not take into account the crisis in Cyprus, where the government dipped into bank accounts to help finance its share of the eurozone bailout. The raid on foreign investors’ money could set a precedent for other European countries – Spain? Italy? – to tap in to uninsured accounts in their banks.

That would send more chills through a business community that, except for a few economies, has been in a deep freeze for more than five years.

Eurozone manufacturers reduced their workforces for the 14th successive month in March, with steep rates of decline reported in France, Italy, Spain, the Netherlands, Ireland and Greece.

The one encouraging number from Europe was that only 33,000 more people joined the ranks of the unemployed in February, the fewest since April 2011. It was a huge drop from the 222,000 that were added to unemployment rolls in January.

Austria (4.8 percent unemployment), Germany (5.4) and Luxembourg (5.5) have stable, thriving economies, while the countries around them flounder.

Congressional Republicans Balk at Raising Minimum Wage

In his recent State of the Union address, President Obama proposed raising the federal minimum wage from its current $7.25 an hour, a level where it has been stuck for three years, to $9 an hour.

Predictably, members of the Republican Party quickly quashed any notion that they would support any such notion.

Sen. Marco Rubio, R-Fla., who gave the official GOP response to Obama’s speech, said: “I want to see people making a lot more than $9 an hour. … The question is, is a minimum wage the best way to do it? And history has said the answer is absolutely not. In fact, the impact of minimum wage usually is that businesses hire less people.”

Congressman and former vice presidential candidate Paul Ryan said, “I think it actually is counterproductive in many ways. You end up costing jobs from people who are the bottom rung of the economic ladder.”

French philosopher Michel de Montaigne once wrote: “Nothing is so firmly believed as what is least known.”

What Rubio and Ryan know the least about is the impact that raising the minimum wage actually has on the hiring of workers, as well as on the economy in general.

Research Disproves Congressional Assertions

The fact is, since the Fair Labor Standards Act established the original federal minimum wage in 1938, research on minimum wage legislation is not only voluminous, it is contradictory to what Ryan, Rubio and others in the GOP choose to believe — that raising the minimum wage reduces employment.

Again and again, researchers have found that raising the minimum wage, whether on the national, state, county or municipal level, has no negative effect on employment – not even during hard economic times such as these.

For instance, a study published in 2010 in the Review of Economics and Statistics, found “no detectable employment losses from the kind of minimum wage increases we have seen in the United States.”

Many other studies over the past few decades have reached similar conclusions.

In fact, some studies have found employment actually increases slightly when a minimum wage is raised, because it has the effect of reducing turnover, forcing firms away from a low-human capital investment model to one where workers stay attached to the workforce and employers make stronger investments in training.

Indeed, a recent report by the Economic Policy Institute projects that increasing the federal minimum wage to $9.80 by July 2014, would:

  • Raise the wages of about 28 million workers, who would receive nearly $40 billion in additional earnings
  • Increase the Gross Domestic Product (GDP) by roughly $25 billion
  • Create approximately 100,000 net new jobs

So not only does raising the minimum wage not cause job losses, it actually helps the economy by putting more money into the pockets of more workers, who then increase the demand for goods and services with their greater purchasing power, spurring even more employment and rising wages for all.

In addition, taxpayers are better off when the minimum wage goes up because they have to bear fewer of the negative externalities – such as the costs of food stamps and Medicaid – that low-wage workers must rely upon because, even when they work full time, their inadequate incomes keep them below the poverty line.

Rubio and Ryan have their history backward, and their understanding is erroneous.

Big Business Employs Most Low-Wage Workers

There’s yet another Republican objection to raising the minimum wage, one voiced by Speaker of the House John Boehner, R-Ohio, who said small businesses would be less likely to hire low-skilled workers if it cost them more to do so.

Once again, what the Speaker seems to know the least about is what he chooses most firmly to believe.

Here are the facts as revealed by the National Employment Law Project in July 2012:

  • The majority (66 percent) of low-wage workers are not employed by small businesses, but rather by large corporations with more than 100 employees.
  • The 50 largest employers of low-wage workers largely are recovered from the recession, and most are in strong financial positions: 92 percent were profitable last year and 78 percent have been profitable for the past three years.
  • Top executive compensation averaged $9.4 million last year at these firms, and they returned $174.8 billion to shareholders in dividends or share buybacks over the past five years.
  • The three largest low-wage employers in the United States are Walmart, Yum! Brands (operator of fast-food chains Pizza Hut, Taco Bell, and KFC) and McDonald’s. Each was profitable during all of the past three fiscal years, and each earns profits that are substantially higher than their pre-recession levels.

What the study clearly shows, then, is that the majority of the impact of any increase in the minimum wage will therefore be felt by large corporations rather than by small mom-and-pop businesses, and that “the nation’s top low-wage employers can readily afford to pay for a higher minimum wage for their lowest-paid employees.”

Most Americans Support Raising the Minimum Wage

Outside of Congress, support for raising the federal minimum wage is undeniably strong: 91 percent of Democrats, 74 percent of independents and 50 percent of Republicans all favor raising the minimum wage.

Inside the Capitol, support is less than enthusiastic.

Now then: Congressional pay is set at $174,000 a year. And since many congressional critics believe that the last session of Congress was one of the least productive in a generation, the most revealing thing that can be said about Congress and the minimum wage was perhaps best summed up by comedian Jay Leno:

“Believe me, when it comes to doing the minimum for their wage, Congress knows what it’s talking about.”

The War on Labor Unions – Part 2

In Part 1, the War on Labor Unions was exposed as a premeditated political attack on middle-class working men and women, cynically camouflaged as some sort of protection of the rights and freedoms of those very same workers. Gov. Rick Snyder of Michigan, who just signed legislation making his state the 24th”right-to-work” state in the nation, continues to claim that the new law is not “anti-union,” but rather “pro-worker.”

The underlying argument that fuels this canard is that workers should have freedom of choice when it comes to whether or not they want to join a labor union. The unions claim that mandatory union membership is a fair price to pay for getting a job in a business or industry in which all the workers are already protected by a contract that was achieved through union-sponsored collective bargaining. Nobody is taking away anyone’s “right” to work, they maintain, just the “right” to freeload off of fellow workers.

Vague Notion of Freedom

In Michigan, the unions just lost that battle as a matter of law. They also lost the public relations battle, having been portrayed as some sort of malevolent force intent on taking away from the rest of us something of value – in this case, some vague notion of freedom that was all too easily demagogued by the state’s politicians for the purpose of garnering public support for the anti-union measures.

In fact, right-to-work laws are simply a way in which union membership and power can be diluted and diminished. They are always sponsored by a state’s business interests as a way of tilting the labor/management scales more favorably in their direction. They are also used as an advertising gimmick to attract new business to a state; eventually, weakened unions means less bargaining power for them, which tends to drive down wages and labor costs. Nine out of 10 of the lowest-income states in the country have right-to-work legislation in place.

But while the dramatic public sideshow of the supposed ruin that labor unions are ostensibly causing the American economy is reaching some sort of climax, the real story of theft and robbery that actually has been harming states, cities and towns across the country for the past decade, was quietly and meticulously unearthed this past summer in a federal courtroom in downtown Manhattan.

Broad Conspiracy

In the matter of the United States of America v. Carollo, Goldberg and Grimm, federal prosecutors successfully proved that a broad conspiracy of banks, finance companies and various middlemen working together were able to rig the municipal bond market, allowing them to stealthily and systematically rip off municipal governments across the country of billions of dollars for a period of at least 10 years.

Here’s how the scam worked: Whenever municipalities need money for some public works project, they float a bond issue. A financial firm on Wall Street is contracted to issue those bonds, say, in a town’s name, and then sell them to investors who expect a return – principal plus interest – when the bond becomes due.

After its bonds are sold, a town now has a lot of cash in its coffers, which it will dole out – usually over several years – to builders, contractors, etc., until the particular project for which the bonds were issued is completed. But that means that it also has a lot of money sitting around that could be earning interest before it has to be disbursed. So the town hires a broker to set up a public auction, inviting banks to compete for the town’s business.

The broker’s aim is to get the town the best possible deal it can from among the banks’ secret bids. Generally at least three banks are required to offer competitive rates at auction. If Bank A offers, say, 5 percent, but Bank B offers 5 and a quarter, and Bank C, 5 and a half, the difference to a town with a multimillion-dollar bond sale can be many tens of thousands of dollars. Thus, an honest broker, indirectly, helps a town make money.

But if the fair-market system is illicitly rigged by banks colluding with one another and by bribing brokers into holding phony auctions in which each party already knows  in advance what the other party is intending to offer, interest rates can be shaved and a town can lose precious points while the banks save money  and the kickbacks flow.

And that is precisely what occurred. Instead of submitting competitive bids, big banks simply divvied up amongst themselves all the business of all the American cities and towns that had money to invest. And while the complexities of these financial shenanigans make it difficult to ascertain exactly how much money was skimmed over more than a decade’s worth of bid-rigging, it’s safe to say, based on the $673 million restitution that four big banks that took part in the scam agreed to pay after deciding to cooperate with the government’s case, that billions of dollars is not an unreasonable estimate.

The Perpetrators

Who were the perpetrators that managed this heist while politicians across the country were busy pointing the finger of blame at its unionized labor force? Here they are: Bank of America, Wells Fargo, J.P. Morgan Chase, USB, Goldman-Sachs, Transamerica, AIG, GE Capital (where Carollo, Goldberg and Grimm worked), as well as banks in Scotland, Germany, France and the Netherlands, not to mention the now-defunct investment firms Lehman Brothers and Bear Stearns, among others. Also indicted was CDR, the brokerage firm that set up many of the phony auctions.

So while the War on Labor Unions is really a diversionary scheme, the real war against the American people is the one that was quietly being executed by the giant banks and financial institutions, both foreign and domestic, and their many enablers, who really don’t believe at all in the free market on which the capitalist system is supposedly based.

And with each new disclosure of scandal and illegality (more and more banks, like London-based Barclays, have recently been accused of rigging LIBOR interest rates for years, an unlawful practice that affects all of our credit cards, home mortgages and personal loans), it becomes more and more clear that these enemies of the people don’t believe in taking prisoners either – just more and more of our own money. And it doesn’t seem to matter to them how they get it.

The War on Labor Unions – Part 1

There are hot wars, and there are cold wars. There are good wars (the War on Poverty), unwise wars (the War on Drugs), unnecessary wars (Iraq) and endless wars (the Middle East). There are phony wars (the War against Christmas) and wars of attrition (the embargo of Cuba).

Another kind of war is being waged these days in America’s heartland — the War against Labor Unions. It doesn’t use guns or rockets to achieve its victories; the levers of government and the so-called democratic process are its weapons of choice. Its legions are unarmed; in fact, most of them wear expensive suits. Its terrain is not the jungle or desert, but rather the great halls and back rooms of state capitals throughout the Midwest.

The New Battlefield: Michigan

At the moment, the War against Labor Unions is flaring up in Michigan. Rick Snyder, its Republican governor, has just signed legislation passed by the Republican-led Legislature, making the state, a traditional bastion of organized labor in America, the nation’s 24th with “right-to-work” laws governing the relationship between unions and their employers, both private and public.

In a right-to-work state, unions are prohibited from requiring mandatory membership dues from workers as a condition of employment. Proponents of right-to-work laws contend that no worker should be coerced into joining a labor union in order to get a job. Opponents counter with the argument that since, in a union shop, all workers are covered under the same collective bargaining agreement, every worker should be required to pay his or her “fair share” fee for the protections that the union-negotiated contract affords.

Of course, the phrase “right-to-work” itself is a cynical example of language obfuscation. Labor unions are not interested in limiting anyone’s “right to work,” to have a job, to make a living; they simply want to prevent some workers from freeloading on the backs of others by getting benefits they decline to pay for.

And “right”-to-work supporters are not really that concerned with the constitutional “rights” of workers; they are much more focused on using right-to-work statutes as a way to weaken union membership and clout, thus giving employers a greater edge in the age-old struggle between management and labor. One only need follow the money – the funding for many of these anti-union campaigns comes from wealthy corporate interests.

President Obama nailed it when he commented about the situation in Michigan: “You know, these so-called right-to-work laws, they don’t have to do with economics. They have everything to do with politics. What they’re really talking about is giving you the right to work for less money.”

Someone to Blame

But why are these legislative battles against rank and file, working men and women – teachers, nurses, firefighters, social workers, factory hands, garbage truck drivers, etc. — breaking out just now in places like Wisconsin, Ohio, Indiana and the Wolverine state?

Well, it’s no secret that, like most, these states’ budgets have been severely pummeled and squeezed over the course of the Great Recession, and politicians have had to cut many services their constituents have come to rely upon. Naturally, they need someone to blame for their diminished circumstances, and the labor unions are a tempting target; when things are tough all around and there’s a recognizable scapegoat in the vicinity, it’s generally a good time to unleash the shock troops.

But first, in order to get the public firmly on its side, anti-union warriors must promulgate a big lie, a flim-flam, a misdirection that will get the population to look at the scapegoat and not at the man behind the curtain. So, their best tactic is to convince the people that labor unions want to take from the rest of us something that doesn’t rightly belong to them.

In Wisconsin, it was government worker pension funds — Governor Walker maintained they were hemorrhaging the state treasury. In Michigan, it’s the few bucks a month from the guy who needs a job, but doesn’t want to be forced, kicking and screaming, into joining some left-leaning, anti-freedom, socialistic labor union.

The Truth

The truth, of course, is that labor unions are not taking away anything that belongs to the rest of us. They never have. In fact, the stronger case can be made that, over the past century, labor unions have given us, what was until recently, the world’s highest standard of living.

Labor unions gave us the 40-hour work week, paid vacations, company-sponsored health insurance, and retirement benefits. They helped end child labor, secured safer workplaces, and fought for a minimum wage. They have won those rights and benefits for all workers, sometimes at the cost of blood.

Labor unions have given this country a legacy of fairness and equity in the marketplace. No. Labor unions have not taken away anything that belongs to the rest of us.

Want to know who has been taking away what belongs to the rest of us? The devious and dangerous players who have bilked states, cities and towns across the country for billions of dollars over the past 10 years? The cabal that’s been ripping off Michigan, and Wisconsin, and Alabama, and New Mexico, and Utah, and dozens of other governments and municipalities in America?

That answer is revealed in Part 2.

Unemployment Rate Dips; 146,000 New Jobs Added in November

In November, the U.S. unemployment rate fell to its lowest level in four years and 146,000 jobs were added by a still-improving economy, but the background news to both numbers muted any celebration.

November’s jobless rate dipped to 7.7 percent, the best since February 2008, but some of that can be attributed to the fact that 350,000 workers gave up looking for a job and dropped out of the work force. The Labor Department only counts those actively seeking work as unemployed.

Less than Impressed

The job creation numbers also had a twist to them. The 146,000 new jobs were 58 percent higher than what economists predicted for November (they estimated 85,000 new jobs), but barely make a dent in the overall unemployment number of 12 million Americans.

“It’s not something to get too excited about,”  Nigel Gault, chief U.S. economist for IHS Global Insight, told The New York Times. “The number is 146,000, and the average so far this year is 151,000. We’re pretty much in line with what we’ve been doing.”

Republican House Speaker John Boehner, still engaged in a battle with President Obama over the “fiscal cliff” crisis, was among those not impressed with the lukewarm employment numbers.

“The Democrats’ plan to slow-walk our economy to the edge of the fiscal cliff instead of engaging in serious talks is a threat to our economy,” Boehner said in a statement. “The slow-walk strategy is unfair to taxpayers, unfair to small businesses and unfair to all those looking for work.”

Heidi Shierholz, an economist with the Economic Policy Institute, said that while the unemployment meter is running in the right direction, the pace is so slow that it would take 10 years to return to the pre-recession unemployment rate.

“The November data provide a clear reminder that mass joblessness remains the real and present economic danger this country faces,” Shierholz said. “This country has 4.8 million workers who have been unemployed for more than six months, four times as many as the 1.2 million in 2007.”

Retail Sector Leads the Way

The retail sector, continuing a trend started three months ago, showed the most significant gains, adding 53,000 jobs in November. Retail trade employment is up 140,000 over the last three months.

Professional and business services added 43,000 jobs, while the health care industry picked up 20,000. The construction industry suffered the biggest downturn, losing 20,000 jobs.

John Galvin, acting commissioner for the Bureau of Labor Statistics, said that Hurricane Sandy, which was supposed to have a negative impact on the unemployment rate, was no factor at all. Galvin said that workers have to be off work for an entire pay period and not be paid for the time missed in order to be counted among the unemployed.

Some of the workers in the areas of the Northeast hardest hit by Hurricane Sandy missed a few days or worked half-days while businesses cleaned up after the storm.

Fast-Food Workers in NYC Go On Strike: I’m Lovin’ It

“You deserve a break today, So get out and get away … to McDonald’s!”

Last week, 200 New York City fast food workers took a break and got away from McDonald’s and several other fast-food chains in the Big Apple. In the first-of-its-kind labor action, workers demanded higher wages and recognition of a new union called the Fast Food Workers Committee.


Inspired by the Black Friday walkout by Walmart workers across the country, the action, called Fast Food Forward, was also the culmination of months of organizing by New York Communities for Change (NYCC), a group that has helped unionize low-wage car wash and grocery workers in New York, and the 2.1 million-member Service Employees International Union (SEIU), which hired 40 full-time organizers to spearhead the campaign.

“What you want is what you get!”

The fast-food industry has always been difficult to unionize. In the recent past, fast-food chains like McDonald’s, Burger King, Domino’s, KFC, Taco Bell, Wendy’s and Papa John’s were largely staffed by teenagers working part-time and college kids who needed a little extra money — a workforce that could hardly be counted upon to pay union dues or care about the long term.

In addition, turnover has always been high in the industry, and many individual stores are franchises that are forced to take their orders from national headquarters that promulgate and enforce company rules. Individual franchisees also traditionally have feared paying wages that would put them at an economic disadvantage against any nearby fast-food outlets.

But today, thanks in part to the Great Recession, more and more fast-food workers are middle-aged and older, are more highly educated (in major U.S. cities, 9 percent have been to college), and have held jobs in unionized companies or union-protected industries, and thus are more familiar with how unions work and why they are important to their financial well-being.

“We do it all for you!”

And the number of fast-food workers is growing – industry employment has mushroomed 55 percent since 2000. In 2011, the country had 2,799,430 combined food preparation and serving workers, including workers in fast-food restaurants. New York City alone has some 50,000 fast-food workers, making a median hourly wage of $8.90 — less than half of what an adult with one child living in the least expensive area of the city needs to be self-sufficient.

In fact, according to the Bureau of Labor Statistics, fast-food employees are among the lowest-paid workers in America, earning an average salary of $18,130 a year — just about the federal poverty line for a family of three. The average New York worker earns about $11,000 annually. That means that the vast number of these individuals are eligible for federal benefits like food stamps and Medicaid, essentially making taxpayers foot the bill for what their employers should be paying for.

“Nobody can do it like McDonald’s can!”

And even though industry executives claim that agreeing to worker demands for health benefits and a raise to $15 an hour would be unfeasible — “there goes the Dollar Menu” — the $200 billion-a-year industry is doing well. Fast-food company CEOs made a combined $1.5 billion last year, and McDonald’s corporate profit was $5.5 billion. Over the past four years, the hamburger chain’s returns have increased 130 percent.

“I’m lovin’ it!”

Will the nascent organizing efforts grow with time and exposure? It may be too early to tell. According to strike organizers, employer retaliation in the form of suspensions and dismissals has already occurred, and the strikers also know that things will not change overnight. (Fast Food Forward is hosting a march of the city’s low-wage workers on Thursday at Herald Square, starting at 4:30 p.m.)

The next time you go to your neighborhood fast-food joint for a meal out, you may want to reflect on what may be the newest ingredient in your Big Mac — it’s called courage.

Take a bite and see if you can taste it.


Photo: Bikeworldtravel /

Groupon and LivingSocial Struggle as Daily Deals Lose Popularity

Groupon executives decided Thursday to keep their CEO, Andrew Mason, but for how long? Amid rapid revenue declines in the daily deal industry, experts wonder if the fad has run its course.

Groupon has been a consumer favorite since its founding in November 2008, with competitors like LivingSocial vying for part of the market. Groupon managed to maintain its edge in the daily deal market by buying up smaller competitor sites, growing quickly and eventually reaching 10,000 employees. But deal-hunting customers have rapidly lost interest in such business models, leading businesses like Groupon to struggle to stay afloat. Groupon has lost 80 percent of its stock value since its initial public offering in November 2011, and LivingSocial recently let go of 400 employees – downsizing its workforce by about 9 percent.

Groupon CEO Narrowly Evades Firing

During Groupon’s regularly scheduled board meeting Thursday , board members scrutinized CEO Mason’s performance and toyed with the idea of replacing him.

Mason himself seemed confident before the meeting, stating Wednesday that he was still the best person for the job. “If I ever thought I wasn’t the right person for the job, I’d be the first person to fire myself,” he said.

Mason, one of three co-founders of Groupon, remains the company’s CEO – for now.

Speculation continues to surround the company and its future performance in the still-struggling economy. In the third quarter of 2012, Groupon boasted nearly 40 million customers but still lost money. With quarterly sales of $569 million, its net loss totaled $3 million.

The company actually considers this an improvement over the third quarter of 2011. That quarter, it earned $430 million but netted a loss of $54 million.

Despite setbacks, Mason and employees continue to take a lighthearted approach to business. The company announced last week in a press release that it would be holding its third annual “Grouponicus” over the holiday season. Grouponicus, it says, is an ancient celebration and a time to take advantage of great deals. From a business standpoint, this year’s celebration is likely to focus on boosting revenue by offering gift suggestions and by providing discounts on popular gifts.

LivingSocial Combats Losses with Widespread Layoffs

LivingSocial faces similar revenue problems as a result of waning customer interest; the company took a hit of $566 million in the third quarter of 2012.

In a bid to cut administrative costs, the company let go of 400 employees worldwide Thursday, totaling 9 percent of its staff of about 4,500. About 160 of the layoffs occurred at the company’s Washington, D.C., headquarters, since it plans to move the bulk of its customer service from D.C. to Tuscon.

The amount of layoffs equates to the total number of employees LivingSocial had just two years ago, when its payroll included only 450 individuals.

Still, executives remain hopeful that LivingSocial will bounce back from significant losses. CEO Tim O’Shaungessy wrote in a company memo that the company aims to “enter 2013 with a growth strategy” that includes making new hires in various departments.


Photo: Annette Shaff /