Posts Tagged: Civil Rights Act

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17
Jan 11

Martin Luther King Day

Today would have been Martin Luther King Jr’s 81st birthday.   To my generation he was a hero.  Now it seems almost quaint that civil rights issues galvanized our nation.  But the America of Dr. King’s last years was a deeply and overtly racist country.  In the South Blacks could not ride a white bus, go to a white school, drink from a white water fountain, play in a white park or eat at a white lunch counter.  These prohibitions were not custom, but carried the force of law.  The North was not much better, and practiced a more subtle form of racism.   Blacks were steered away from buying homes in white neighborhoods and were denied employment opportunities.

To the 2011 mind, that era seems inconceivable.  We have elected an African American President.  The Civil Rights Act of 1964 is long the established law of the land.  Further, almost every state has anti-discrimination laws.   Major companies and government have affirmative action programs.   We vigorously enforce civil rights laws, and have expanded their scope to protect the aged, the disabled, gender, and pregnant women.  Much of this progress was due to one man, Martin Luther King, Jr., who faced overwhelming odds with threats of arrest and death.   Throughout his life he displayed compassion, thoughtfulness, eloquence and most of all courage.  His concerns were universal.  While foremost in his mind was the plight of Blacks he never forgot the disadvantaged and the downtrodden in American society.  Human dignity was of paramount concern to Dr. King.

We have spoken about the Greatest Generation and the Greediest Generation.  See The Greediest Generation -Where Has Shared Sacrifice Gone? In Dr. King, we had an embodiment of a certain nobility of purpose that existed within America.   Once we were concerned about building a better society.  Along with Dr. King’s civil rights movement there were the New Deal, New Frontier and Great Society.  Public service and volunteerism were a worthy ambition and social justice a worthy cause.

Unfortunately, today we seem to have lost our way.  We are worried about the latest get rich quick, financial scheme and how we can be on the inside of it.  When we are not figuring out how to scam our fellow citizens we entertain ourselves to death.  We are obsessed with success as measured by dollar signs, material goods, and extravagant adventures.  When will the new IPod or Xbox be introduced?  Who will be on Dancing with the Stars or win American Idol or be the Biggest Loser?

Unfortunately, the Biggest Losers are us.  Who speaks for the common man and the underdog today?  A part of all of us died when Martin Luther King, Jr., died.   When he spoke so eloquently that he had a dream, it was not this.

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1
Mar 10

Labor and Employment Laws: The Hidden Job Killer

When we ignore government sleight of hand, the real number of unemployed Americans is a staggering 26.9 million.  In For 15 Million Unemployed any Job is a Good Job; Questions for Pollyannas; Wishes Aren’t Fishes, Michael Shedlock (“Mish”) continues his excellent analysis of the unemployment situation.  Contrary to Bernanke and Obama Administration rosy projections, Mish predicts that official unemployment will remain greater than 9 % through 2015.  In a quote from Allen Sinai, chief global economist for Decision Economics, Mish describes corporate hiring behavior:

American business is about maximizing shareholder value…You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.

Workers are expensive. Federal, state and local employment laws make them more so.

New Deal Labor Legislation

In the late 19th and early 20th century, rapid industrialization resulted in powerful owner/capitalists, virtually powerless workers, and deplorable working conditions.   Upton Sinclair’s The Jungle dramatized the deplorable state of affairs in the meatpacking industry.  In reaction, in 1935, Congress passed the Wagner Act to permit union organizing. Then it enacted the Fair Labor Standards Act to establish minimum pay, limitations on hours and pay for overtime work.  Perhaps labor legislation should have stopped at that point.

Nothing Succeeds Like Excess

New Deal labor legislation was just a springboard for greater federal control over the workplace.   Since 1964, there has been a flood of labor and employment legislation and Executive Orders.

  • The Civil Rights Act prohibits race, color, religion, sex or national origin and pregnancy discrimination.
  • The Age Discrimination in Employment Act prohibits age discrimination.
  • One Executive Order prohibits all forms of discrimination and requires affirmative action.  This includes training and outreach programs and other positive steps which must be incorporated in written personnel policies and a plan which must be updated annually.
  • The Equal Pay Act requires that men and women in the same workplace be given equal pay for equal work.
  • The Americans with Disabilities Act prohibits disability discrimination. The Rehabilitation Act requires most federal contractors and subcontractors to take extra measures to hire and promote qualified disabled individuals.
  • The Occupational Safety and Health Act requires employers to meet legal health and safety standards.
  • The Employment Retirement and Income Security Act (“ERISA”) sets uniform minimum standards to assure that employee benefit plans are established and maintained in a fair and financially sound manner.
  • The Workers Adjustment and Retraining Notification Act requires that covered employers provide notification sixty days before a plant closing or a mass layoff.
  • The Family and Medical Leave Act provides covered employees with entitlement to up to 12 weeks of job-protected, unpaid leave during any 12 months for the following reasons:

-Birth and care of the employee’s newborn or adoption or foster care of a child

-Care of an immediate family member (spouse, child, parent) who has a serious health condition

- The employee’s own serious health condition

These are the major pieces of federal labor and employment legislation, but there are additional enactments regulating the employment relationship.

Since we live in a federal system, state and even municipalities impose additional employment, benefit and labor obligations.  Moreover, the courts have intervened to create doctrines such as wrongful discharge to limit an employer’s right to dismiss an employee at will.

Real World Consequences

Much of the above legislation is grounded in noble sentiment: workplace fairness and employee protection.  But there are real world consequences: a loose definition of “serious health condition” allows employees to take large unpredictable amounts of time off, harming production schedules.  Affirmative action programs require lots of staff and recordkeeping, extra recruitment and training, and slower hiring.  ERISA imposes fiduciary liability on plan sponsors. With virtually every workplace sector protected, firing an employee is difficult, with the ever present danger of a discrimination or retaliation charge. And so the American workplace is now one of the most regulated areas of our economy.

Laws are often a hidden tax. See Ask Your Congressional Representative to Do Nothing.   Allen Sinai has reached the correct conclusion: why hire expensive workers who have a host of protections and entitlements when you can substitute cheaper capital (automated machinery, robots, computers, etc)?  In a globalized economy where a highly motivated, well-trained Chinese worker makes about $1 per hour, the over protected American worker may have priced himself out.

If the Obama Administration is serious about reducing the unemployment rate, it should be thinking about shelving expensive health care initiatives and the Employee Free Choice Act.  More employer cost will equal less American employment.

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