Friends,
I’ve been watching this story gather steam over the last six weeks, and it’s become serious enough to require some attention: “Amazon is arguing in a legal filing that the 88-year-old National Labor Relations Board is unconstitutional, echoing similar arguments made this year by Elon Musk’s SpaceX and the grocery store chain Trader Joe’s in disputes about workers’ rights and organizing,” reports The Associated Press.
The National Labor Relations Board is an agency created in New Deal-era America to enforce labor law and protect workers’ right to organize, giving recourse to workers who feel they’ve been punished for trying to improve their working conditions or form a union. The argument against the NLRB is that judgements are handed down by appointed board members, which the filers claim violates the Constitutionally appointed right to due process and trial by jury.
On its face, this argument completely ignores the fact that the NLRB’s process incorporates Circuit Courts, which have the power to, in the NLRB’s own language, “evaluate the factual and legal basis for the Board’s Order and decide, after briefing or oral argument, whether to enter a judicial decree commanding obedience to the Order.” So the legal process is baked into the NLRB’s procedures. And it certainly seems strange to raise a fundamental constitutional issue like this almost a century after the agency was born.
But that doesn’t mean these suits against the NLRB will simply be dismissed out of hand. As we’ve seen in the Supreme Court and in plenty of courts around the country, trickle-downers have routinely installed judges who are eager to take regulatory power away from the government and return America to a more libertarian, pre-New Deal state.
One of the things I’ve noticed about trickle-downers over the years is that they refuse to acknowledge power imbalances—particularly in the employer-employee relationship. As Nick explained in a recent episode of Pitchfork Economics, “the idea of power was effectively theorized away, out of neoclassical economics. If you assume that markets are perfectly efficient, if you assume that people and business owners have the same amount of power, if you make all these absurd assumptions, you can just pretend like power differentials do not exist in market economies,” he explains. This is similarly absurd, Nick notes, as “pretending that gravity doesn’t exist in physics.”
Why would it benefit employers to argue that there is no power imbalance between workers and employers? As Nick explains, “if you assume—in a world where some people have lots of power and most people have no power—that power doesn’t exist, that is very advantageous to the people with lots of power.”
The NLRB was founded to address that huge disparity in power between workers (who rely on their weekly paychecks for food, clothing, shelter, and health care) and employers (who are quite often multi-billion dollar multinational corporations.) Without a protected right to advocate for themselves and a third party to enforce that right, employees are unlikely to have any power to respond to common injustices like wage theft, unreasonable working conditions, or retaliation for organizing.
The NLRB promises that protection for workers. And while the NLRB has long been criticized by labor advocates for its rather limited enforcement powers, this suit is aimed at entirely eliminating their ability to compel employers to follow the rules. A toothless federal labor enforcement organization is exactly what infamous union-busting employers like Musk, Trader Joe’s, and Amazon want.
The problem with talking about pending court cases like this challenge to the constitutionality of the NLRB is that the modern judicial system is wildly unpredictable—will the case land before a judge who understands the history of the modern labor movement? Or will it fall prey to a partisan judge appointed to undermine the system in an effort to privilege the powerful and further advance trickle-down economics? And will the case wend its way up through the system to the Supreme Court, where a majority of the Justices seem to be willfully ignoring the idea of power imbalances between the super-rich and everyone else?
Because of all those unknowns, it’s hard to come up with action items for cases that are currently in the court system. I’d just encourage you right now to read up on the history of the National Labor Relations Board, and to start talking with friends and family about the importance of the NLRB. Because if the absolute worst-case scenario happens and the NLRB is declared unconstitutional, the workers of America are going to need a plan B.
The Latest Economic News and Updates
Awaiting The State of the Union
Tonight, President Biden will address Congress in his annual State of the Union address. I’m sure we’ll be devoting a significant amount of space to analyzing the economic portions of the speech in next week’s Pitch. But before the main event begins, I wanted to discuss four of the major economic issues that I hope might get some attention in the speech:
Prices: Poll after poll shows that while Americans are feeling better about the economy, they’re still feeling the sting of higher prices. President Biden could use the opportunity to talk about greedflation, and also to urge Congress to pass Senator Baldwin’s Price Gouging Prevention Act, which would stop companies from profiteering at everyone else’s expense. And in an electoral sense, I’d be interested to see which Congresspeople boo or refuse to applaud a bill that would eliminate price-gouging at a federal level.
Housing: While inflation is leveling out in most quarters, rents and mortgages are still way too expensive for the average American, and those prices are staying stubbornly high. Ten years ago, most pundits would have called housing a problem that mostly plagued America’s richest cities, but now virtually every community in America is struggling with high housing costs and a lack of housing supply.
Child care: America’s lack of affordable child care has only grown worse in the last four years, with prices skyrocketing and child care facilities closing around the country. And as we saw in the early lockdown days of the pandemic, when parents don’t have access to child care the working world basically shuts down—especially for women. Two million American women left their jobs to take care of children in 2020 and 2021, and millions more women are still unable to participate in the workforce due to a lack of affordable child care.
Taxes: A vast majority of Americans believe that wealthy people and corporations pay too little in taxes, and taxes are one of the subjects that President Biden is especially gifted at explaining. While Biden’s middle-out agenda has raised wages and created jobs around the nation, and though Biden finally passed a 1% tax on stock buybacks, Americans are correct to think our tax code is still unfairly rigged in favor of outsized wealth for a handful of powerful people. The State of the Union could be the perfect platform to announce a big, bold revision of the tax code.
Those are my picks for the economic topics I’d most like to see discussed tonight. I’d love to hear yours. And I hope you’ll watch along tonight and join me next week to discuss the content of the speech.
Americans Are Hungry for Tax Reform
Speaking of taxes, I wanted to call your attention to this recent Navigator polling, which shows that nearly 4 out of 5 Americans want to raise taxes on the wealthy and big corporations. It’s hard for me to express how huge this polling is—you never see this kind of broad strong support for any issue across party lines and race:
This support is very deep, and that partisan agreement continues even when it affects leaders of their own party. For instance, a big majority of Republicans—61 percent—find it “very concerning” that Republicans in Congress passed big tax breaks for corporations and the wealthy in the Trump tax cuts of 2018.
That partisan support starts to fade into the low-to-mid-30s among Republicans when the polling continues into actual policy solutions, which is unsurprising to anyone who has ever run a poll, but broad support still remains among Democrats and Independents. Some 62 percent of voters support policies that catch tax cheats and make them pay the money they owe, and 64 percent support policies that “make the wealthiest Americans and big corporations pay their fair share in taxes.”
It’s frustrating when the media frames every policy as a 50-50 split in popularity between Democrats and Republicans. Some issues are very simply not contentious, and balancing America’s tax code is at the very top of that list of issues.
Kentucky Lawmakers Move to Eliminate Lunch Breaks
Jason Bailey and Dustin Pugel at KY Policy write about a proposed bill in the Kentucky legislature that, if passed, “would take away Kentucky workers’ rights to lunch and rest breaks at work and would eliminate pay protections, including for time spent traveling to and from a job site during work hours.”
The bill also repeals a protection that would require employers to compensate workers with time-and-a-half overtime pay for working seven days in a row and cuts the statute of limitations for labor violations from five years to three, making it harder for workers to resolve common issues like wage theft and unsafe workplace conditions.
If this bill even gets passed by the state legislature, Democratic Kentucky Governor Andy Beshear would likely veto it. But it’s still a bold move from trickle-downers in the Kentucky legislature, and a reminder of the kind of anti-worker policies that emboldened trickle-downers would pass if given free rein.
Legislators who voted for the bill said they did it to “help business,” but that’s a tired trickle-down argument that doesn’t hold up to reality. Eliminating protections and pay for workers, as well as forcing workers to put in more hours for less or no pay, completely flies in the face of how the economy works in the real world. Those workers won’t have bigger paychecks to spend, and they’ll have less free time to participate in the economy.
Plenty of research shows that anti-worker laws are bad for business. So-called “right-to-work” states like Kentucky passed their anti-union legislation under the argument that it would make their states more attractive to businesses and make it easier for business owners to create jobs, for instance, but a host of research shows that none of that is true. All laws like these do is transfer wealth from working Americans up into the hands of the wealthy few, at the expense of everyone else.
This Week on the Pitchfork Economics Podcast
As we’ve learned over the last two years, there’s often a large disparity between how the economy is actually performing, how economic conditions are being reported, and how people feel about the economy. Although America’s recovery from the pandemic was among the fastest, strongest, and most inclusive of any in the world, Americans felt worse about their economic conditions than peers in many other nations with much poorer economic conditions. This week, Aaron Sojourner, a labor economist and senior researcher at the Upjohn Institute for Employment Research, joins Nick and Goldy to dig into his research exploring this divide between economic perceptions and economic reality.
Closing Thoughts
In the opening of this email, I wrote about trickle-down economics’ refusal to acknowledge the power imbalance that lies between workers and employers. In a recent piece for the New York Times, Adelle Waldman explained the way that retail employers take advantage of this imbalance to exploit workers. And as Waldman writes in the headline, “It’s Not Just Wages.” She explains that in her experience working for a big box store, those imbalances had huge consequences in the daily lives of her fellow employees:
The unpredictability of the hours made life difficult for my co-workers — as much as if not more than the low pay did. On receiving a paycheck for a good week’s work, when they’d worked 39 hours, should they use the money to pay down debt? Or should they hold on to it in case the following week they were scheduled for only four hours and didn’t have enough for food?
Many of my co-workers didn’t have cars; with such unstable pay, they couldn’t secure auto loans. Nor could they count on holding on to the health insurance that part-time workers could receive if they met a minimum threshold of hours per week. While I was at the store, one co-worker lost his health insurance because he didn’t meet the threshold — but not because the store didn’t have the work. Even as his requests for more hours were denied, the store continued to hire additional part-time and seasonal workers.
Most frustrating of all, my co-workers struggled to supplement their income elsewhere, because the unstable hours made it hard to work a second job. If we wanted more hours, we were advised to increase our availability. Problem is, it’s difficult to work a second job when you’re trying to keep yourself as free as possible for your first job.
Labor law is traditionally very slow to close up the loopholes that employers eagerly exploit. Extractive employers have for decades kept employees from earning health care by limiting the number of hours they work, even as they hire more workers. This could be easily resolved by enacting a regulation that would require employers to offer work hours to current employees before bringing on new staff, but even lawmakers in high-wage states have failed to experiment with such a policy.
And while a few localities—including my home of Seattle—have created secure scheduling laws that require employers to give workers two weeks’ advance notice for scheduling, the majority of workers have no such protections. This is a known problem with a tried and tested policy solution, yet there’s very little movement on a national level to enact this policy into federal law.
We talk a lot about paychecks in this newsletter and for good reason: it’s the paychecks of workers that create jobs and grow the economy. But for workers on the lower end of the income scale—especially workers in service industries—the wage gains they’ve made over the last two years have been impressive, but they don’t have the time or the economic freedom to spend those paychecks in such a way that invests in their futures. Scheduling security and flexibility are especially important to workers in school, workers with young children or other caregiving responsibilities, and workers with disabilities. The more we can do to include those workers more fully in the economy, the better off we’ll all be.
Employers don’t just pay us in exchange for our skills, they also pay us for the most valuable commodity of all—our limited time on this planet. And in terms of time, there’s a huge disparity between the haves and the have-nots—perhaps even bigger than the gap between the wages of workers and their CEOs. This could very well be the next big frontier in workers rights.
Be kind. Be brave. Take good care of yourself and your loved ones.
Zach