It's a David and Goliath story, only in this case there are 120 Davids taking on a hidden Goliath of an industry that every day touches everyone who is reading this in hundreds of ways. The port trucking industry is built on an illegal fiction, designed to rip off the 120 drivers who went on strike at the ports of Los Angeles and Long Beach this week.
They are not alone; 49,000 port truck drivers around the country work long hours at low pay with no benefits or basic worker protections like unemployment insurance or workers compensation, because the industry misclassifies them as independent contractors. The drivers' courageous action is one more facet of a surging labor and community movement, which is starting to take on the captains of America's low-wage economy.
Virtually everything you are wearing now that was made overseas came through our nation's ports. So did every imported item in your office or home. Port truck drivers transported those goods from ship terminals to rail yards and warehouse centers, for distribution to stores around the country. Starting more than 30 years ago, when the trucking industry was deregulated during the Carter administration, the industry was taken over by firms with a business model based on driving down drivers' incomes by treating them as independent contractors instead of employees.
The new model was based on a lie. The drivers weren't really independent truck drivers, with their own rigs. They still worked for one distribution company, which totally controlled everything about their work - their hours, their shipments, the rates they were paid. The company supplied the trucks they drove. But by insisting the drivers accept the new arrangement if they wanted to work, the companies avoided paying payroll taxes, workers compensation, and unemployment benefits, let alone health or retirement benefits. The drivers were forced to pay to lease, fuel and maintain the trucks out of their own paychecks.
The result of this scam has been high profits for the companies, lower wages and no workplace protections for the drivers, plus big losses to the social insurance funds. This arrangement put employers who complied with the law by continuing to treat their workers as employees at a competitive disadvantage.
The port drivers' story is emblematic of the forces that crushed America's middle class. Good paying, often union jobs were replaced by low wage, no-benefit jobs. "Manufactured in the U.S." was displaced by foreign goods, sold to consumers through the Wal-Marts and Home Depots and other giant retailers that perch at the end of global supply chains. Government, stripped of resources and will by corporate lobbyists and their wholly-owned elected officials, sat by while the law was violated and social insurance programs were weakened. And corporate profits soared.
But times are beginning to change. The strike in Southern California carries with it all the elements and power of the new movement of low-wage workers and their allies to create a good jobs economy. The foundation of the strategy is the willingness of low-wages workers to risk their jobs to fight back. The strategy is driven by strategic, legal, and financial assistance supplied by labor unions, partnerships with community groups, and public campaigns against big brand names.
The strikers, like many other port drivers, are mostly immigrants who often don't speak English. Only recently did they become aware that their rights were being violated, after a free legal clinic was set up by two community groups at the port. Since then, drivers have filed more than 400 claims against companies under California's wage and hour laws. The first 19 rulings resulted in an average award of $66,240, largely for wage and hour violations and illegal paycheck deductions for items like truck leases.
The claims are part of an aggressive legal strategy, which includes filings under California's wage and hour laws, class action suits, and claims that the companies are violating federal labor laws. The goal is for the firms to face such an onslaught of fines and court orders that they will begin to realize it would be better to abide by the law, rather than continue to defend their practices in court. California Attorney General Kamala Harris could be hugely helpful here if she used the growing number of cases to insist on an industry wide compliance settlement.
The companies are fighting back. "It's all out war," an attorney for two workers who were fired for both supporting a union and pressing wage claims, told me. Green Fleet, the company that fired the workers and one of the companies being picketed, is using the full arsenal of union-busting tactics, including firing workers who are leading union efforts and hiring union busters who threaten workers. The company's goal is to terrify other workers, so that they won't support forming a union or file wage claims.
The NLRB ruled in the workers' favor, establishing that they are employees, not independent contractors, but Green Fleet is appealing in order to delay any relief. The fired workers' attorneys are asking a federal judge to immediately order the companies to rehire the workers who were fired and to inform all the workers of their right to form a union and protest unfair labor practices.
In the face of this illegal harassment, the 120 drivers at Green Fleet and other firms walked off the job. They want to join the Teamsters union, which is providing key strategic support to their efforts through their Justice for Port Drivers campaign. Many drivers recently saw the benefits of unionization when drivers won union representation at Toll Global Holdings, an Australian based company, which is unionized in their home country. The unionized drivers actually get paid for the hours they spend waiting to pick up merchandise, and receive better wages and benefits.
Los Angeles' well-organized community-labor coalition, led by LAANE, has turned out hundreds of picketers to join the drivers. The picketers block company trucks driven by drivers who have not joined the strike. The pickets create even longer lines of trucks at the marine terminals, where ships arrive with containers full of goods. This is one way that the strikers can exercise the economic power to get the companies to settle. The Teamsters report that already some terminals have told the companies being struck to stop picking up goods in order to clear the blockade.
Another weapon in the campaign is public pressure on the big brands that are the ultimate beneficiaries of the low-wages paid to the port drivers. All of Skechers shoes are delivered by Green Fleet. Protestors attended Skechers' annual shareholder meetings, have leafleted stores, and this week had a plane fly over the company's flagship L.A. store with a banner that read, "Skechers - laced with misery". As LAANE's Danny Feingold points out, unlike some other retailers, such as Nike, Skechers has refused to sign a code of conduct with labor standards for its contractors.
Another element in the port drivers' campaign, as in low-wage workers' campaigns nationally, is a push to change public policy. There are some 75,000 port drivers around the country, of whom 49,000 are misclassified as independent contractors. The New York and New Jersey legislatures both passed bills in the last year toughening standards and enforcement for misclassification of port truck drivers. While New Jersey's Governor Chris Christie vetoed that state's bill, the New York legislation signed by Governor Andrew Cuomo includes strict standards and most importantly, civil and criminal penalties.
There is a new movement growing in America, comprised of courageous low-wage workers and backed by unions, community groups, and activists to take on the huge companies that drive the low-wage economy. From fast food, to Wal-Mart, to workers who make car seats and immigrants who wash cars, the movement is learning a new strategy, based on mobilizing workers and the public. The twin goals of this movement are to enable workers to organize unions and to enact new public policy to rebuild the middle class. You can support the movement now, and lend a hand to port drivers who are on strike, by learning more about Justice for Drivers Hardship Fund. Remember, the device on which you are reading this now was delivered by a port driver.
Originally published on Next New Deal.
You've considered running a business but keep wondering whether conditions will be right to support your winning idea. Or perhaps you have been dabbling with something on the side and yet can't convince yourself that it's the right time to make the leap from safety.
There's always risk in starting a business. But the present is a great time to do so. Here are 10 reasons to start your next act and become an entrepreneur now.
A modern business needs technology. Even if you're not creating the next hit app, you'll want customer relationship management, accounting, website and email hosting, and possibly design software or other tools. Cloud computing lets you get needed services on a monthly basis without laying out too much cash at the start. Also, hardware is relatively cheap, so getting an upgraded PC or tablet won't cost a body part or two.
Having a career is a fine goal. But placing faith in a job as a way to advance is a poor strategy. As someone recently pointed out, mediocre bosses typically get ahead in corporations because they are the most likely to make "safe" choices. When you work for such a boss and company, you won't get a chance to shine, either, or learn what you need to grow.
As researchers at the Brookings Institution have shown, entrepreneurship has been on a decline in this country for decades. The rate at which new businesses start has fallen below the rate at which they close. The reason isn't exactly clear, but it doesn't have to be. Fewer startups mean less competition for money, people, attention, and customers.
Even as potential competition drops, it hasn't gone away. But that's no matter, either. Competitors help create and enlarge markets, acting as a marketing multiplier and giving credibility to an endeavor. In addition, you can make competitors work for you. Welcome them.
Worry about risking it all is understandable, particularly if you have people who depend on your ability to bring home a paycheck. But there's no reason to jump into the deep end of the business pool if you don't have the resources for such a gamble. Start your business on the side. Given how so much in communications and human interaction now happen online, it's easier than ever to get a part-time venture going, find a market, close business, and get paid.
The flip side of entrepreneurial risk is the chance you take working for a corporation. When things get bad, and they can without any notice, companies often downsize. Too often people with more experience get booted out the door to be replaced by someone cheaper because a bean-counter assumes that everyone is completely interchangeable. Or maybe you'll hear that the company has reduced benefits or moved your office to another state. At least start developing your business on the side so that you have some options if things turn sour and you become part of this season's staff reductions.
Globalization has been brutal on millions of people who became sitting ducks when their jobs were shipped overseas. And yet, the trend does have its upside for businesses of all sizes. There are new sources of products, components, engineering, design, and other resources at lower prices than in the US. Also, there are new markets that offer fresh opportunities.
All those talented and experienced people who now have no jobs because they were sitting ducks have found that new job creation has mostly been in low-paying sectors. That means there are enormous personnel resources waiting for a reasonable opportunity. If you need talent, you can find it.
Executives love to bemoan how regulations are "killing" them, even as profits and revenue climb every year. Yes, let the tears flow. The good thing for your startup is that it's much smaller than the cut-off for many regulations, so you can operate more freely even as larger competitors can't. In addition, one of the problems many entrepreneurs face is that the need for health insurance can keep them tethered to a corporate desk. Thanks to the ACA, Obamacare, or whatever you want to call it, you can get insurance and not worry about pre-existing conditions. Paying the entire insurance bill isn't cheap, but you have far more flexibility now.
The biggest reason that now is the time is because later almost never is. You can wait yourself into old age and regret, but you don't need to. Even if your business doesn't work, it won't be the end of your life. Many entrepreneurs go through multiple businesses to find the one that works for them. In the words of playwright Samuel Becket: "Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better." But do it now.
In March 2014, I was asked to speak among experts from around the world at the International Exhibition and Seminar on Correctional Facilities entitled "Una Ventana Al Mundo De La Reclusión" at the National University of Colombia in Bogotá, Colombia. The conference was developed and coordinated by the Colombian Ministry of Justice in partnership with the university in order to bring together global government and private industry leaders from Spain, Belgium, Argentina, the United States and other countries to discuss the exploding global rates of incarceration and recidivism. Internationally, the rate of recidivism for offenders returning to the prison system within three years of release exceeds 70 percent. This cycle creates an alarming burden on all respective economies. Around the world, there is genuine interest in re-thinking crime prevention, criminal justice and prison delivery systems.
The Colombian leadership and reform efforts that are transforming their capital city, Bogotá, and country from its reputation as one of the most dangerous countries in the world into a vibrant economic destination for investment set the stage for the conference. The nation's commitment to investing in workforce development and reducing corruption is not going unnoticed by investors. By comparison, last year Bogotá attracted $2.76 billion in investment compared to Chicago's $1.4 billion. According to Luis Enrique Alamos, principle associate of Price Waterhouse Coopers, "The political and economic stability and growth prospects associated with its internal market, have positioned Colombia as a very attractive destination to invest in for the countries of the region."
At the conference, attendees considered the causes of crime and the problems prison populations face at the root level; and investing in ways to help offenders reintegrate into society as positive and productive citizens of their communities, reducing recidivism rates. It was exciting to address a captive, international audience about our experience serving reentry populations at A Safe Haven through our social enterprise model in Chicago that empirical data presents as a more holistic, person-centered solution than traditional reentry programs. Programs at A Safe Haven are designed to provide safe housing, nutrition, adult education, substance abuse and mental health treatment, job training and placement. What makes A Safe Haven unique is the 'vertically integrated ecosystem' that not only includes comprehensive social services, but also helps provide employment and permanent housing to people with significant barriers.
A Safe Haven invests and partners with social enterprise businesses that create landscaping, catering, pest control, customer service and sales jobs and employ individuals that have earned a second chance. Besides sparking significant economic development in poverty-stricken communities by creating employment and housing opportunities, the social enterprise businesses enhance the foundation's sustainability in light of shrinking government budgets for human service agencies. Every country should consider this approach as a viable option for prevention because it addresses fundamental human needs and provides successful and cost-effective alternatives to incarceration.
Regretfully, the United States criminal justice system has the highest prison population in the world with 2.2 million people incarcerated and approximately 7.7 million people under some form of correctional supervision; and the system has a recidivism rate in excess of 70 percent. According to a PEW Research study, the high recidivism rate accounts for most of the $52 billion spent on existing correctional systems, the study also indicated that a 10 percent reduction in the rate of recidivism would generate future cost-savings of almost $700 million.
The total costs of incarceration from causes to consequences are incalculable and rising. Without a comprehensive plan to address the structural causes of recidivism and incarceration, these costs will continue to rise and burden our economy. The Bogotá conference on correctional facilities was an open forum indicating that the rest of the world is acknowledging that these unsustainable costs can only be reduced by addressing the "real" issues for individuals in the criminal justice system, often rooted in poverty related issues.
The trip and opportunity to speak moved me to break my own perceptions of a nation that I believed was mired in corruption and crime. I found myself inspired as I witnessed government leaders making a commitment to building a more humane, accountable and sustainable society by considering new ideas. They were open to a new paradigm of involving community stakeholders in incarceration and re-entry services. In times of global turmoil, it is important to remember that there are countries investing in comprehensive progress for their people.
It was exciting to see that our work in Chicago is serving as a blue print for innovation and being embraced as an international model by these leaders; they saw its potential to improve challenging, entrenched systems with superior performance metrics. Our mission at A Safe Haven is to offer solutions to poverty and crime; and alternative approaches and systems with a proven track record of impacting long-term, sustainable economic self-sufficiency for our clients. In our home city of Chicago, we were proud to offer a spotlight of hope in a city that has been mired in the media with much of the same controversy that plagued Bogotá, Colombia. In the United States, we must continue to invest in 'best practices' for human services that will reduce our prison population and return our nation to a global destination for tourists, corporations and investors.