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Workplace Issues Today: South African Wal-Mart hearings continue

The Competition Tribunal hearings over Wal-Mart in South Africa are continuing, with both sides attempting to convince the tribunal. Wal-Mart is seeking to buy South African retail chain Massmart, a move which unions and some government agencies are opposing. They argue that Wal-Mart’s business model hurts small businesses, depresses the local economy and that the company has an anti-union strategy. The opponents of the buyout point to countries like Norway, Sweden and Holland, who dis-invested from Wal-Mart because of the possibility of human rights violations. Massmart and Wal-Mart say that the deal will be good for small businesses, will create jobs and will introduce competition into South Africa. Hearings will continue to May 13, and on May 16 the tribunal will hear legal arguments.

See “CEO’s payout just another brick in the Walmart deal,” by Lloyd Gedye, Mail & Guardian, May 09 2011 (SD)

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Workplace Issues Today: Dearborn teachers agree to innovative plan

The Dearborn Federation of Teachers has approved a new four-year contract. The contract includes pay cuts, as well as a new health care plan. The contract says that the school will cap its contribution to employee health care at $12,000 per employee, and that the union will purchase and manage the plan. The union will purchase the plan through the Michigan State AFL-CIO Public Employee Trust, which provides health care plans for other public employees. The superintendent of the school district and the president of the Michigan chapter of the American Federation of Teachers both praised the plan, and said that it could serve as a model for other schools. The overall contract is expected to save the district around $4 million next year.

See “Dearborn teachers union votes to run health plan,” Chicago Tribune May 04 2011 , (SD)

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Workplace Issues Today: Foxconn asked workers to sign non suicide pledges

An investigation by the Centre for Research on Multinational Companies and Students and Scholars Against Corporate Misbehaviour found that workers in Foxconn factories in China were forced to sign ‘no suicide’ pledges after a string of suicides last year. The investigation found that workers were accused of committing suicide to secure large payments to family members, and had to promise that if they did commit suicide, their families would only seek the minimum in damages. The report also found that workers were working excessive overtime in bad conditions, and had little time outside the factory. Foxconn manufacturers products for Apple.

See “Foxconn workers forced to sign ‘no suicide’ pledge,” Times of India, May 02 2011 (SD)

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Workplace Issues Today: Los Angeles workers accept deal

15 of 19 bargaining units in Los Angeles accepted a deal that will raise health care and pension costs, but also wages for workers. The deal, which the Mayor says will save around $200 million over the next several years, also includes a no furlough clause for the duration of the agreement, which runs through 2014. The Mayor said that those who rejected the deal would be subject to as many as 36 furlough next year. The group of workers who voted on the deal does not include police and firefighters, who are holding separate negotiations. Workers who rejected the deal include attorneys and clerical workers.

See “With city in crisis, most LA unions endorse pact,” by Michael R. Blood,, Apr 27 2011 (SD)

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Workplace Issues Today: Brown bargains contracts, faces critics

After California Governor Jerry Brown failed to meet targets he had outlined for savings in union contracts, critics are saying that he let the unions take advantage. the Governor says that he did the best he could, and that he never intended to reach the figures outlined in the budget. Brown had predicted that he would reduce take home pay by 10%, but only reduced it between 3-5%. Now some legislators say that he will have trouble getting the contracts ratified by the Legislature, saying that most Republicans will not vote to pass the contracts. The Governor says that there was only so much he could do and that this was it.

See “Jerry Brown falls short on union contracts,” by George Skelton, Los Angeles Times, Apr 25 2011 (SD)

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Workplace Issues Today: United Farm Workers backs California card-check bill

The United Farm Workers is backing a California bill that would provide for card-check elections, where if a majority of workers signed and turned in cards stating that they wanted the union, there would not be a secret ballot election. The union says that in addition to high turnover and changes in who farm workers are, fear of employer reprisal keeps many workers away from the union. The UFW says that its declining membership can be linked to those changes, but that taking union elections away from workplaces will reduce the intimidation of workers. Employers oppose the bill, saying that most of them follow the law, and that any problems should be addressed specifically. The bill is due to be voted on by the State Assembly, and would become the first card-check law to cover a large group of private employers.

See “United Farm Workers fight dwindling membership,” The Associated Press, Apr 20 2011 (SD)

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Workplace Issues Today: Italian union files charges against Fiat

Italian metalworkers union Fiom has filed a complaint against car manufacturer Fiat, accusing the company of violating Italian and European Union rules to impose new working conditions at its Italian plants. Fiom and Fiat have been clashing since last year, when the car maker said that it needed to make changes to working conditions at its Italian plants in order to continue to invest in them. Other unions at the plants have accepted the working conditions through member referendums. Fiom has staged protests and strikes against Fiat. Talks between the company and union are at an impasse.

See “Italian Union Files Legal,” by Gilles Castonguay, The Wall Street Journal, Apr 18 2011 (SD)

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The minimum wage and labor market outcomes (Book of the Month)

featured1104The minimum wage and labor market outcomes by Christopher J. Flinn is Catherwood’s Book of the Month.

In The Minimum Wage and Labor Market Outcomes, Christopher Flinn argues that in assessing the effects of the minimum wage (in the United States and elsewhere), a behavioral framework is invaluable for guiding empirical work and the interpretation of results. Flinn develops a job search and wage bargaining model that is capable of generating labor market outcomes consistent with observed wage and unemployment duration distributions, and also can account for observed changes in employment rates and wages after a minimum wage change. Flinn uses previous studies from the minimum wage literature to demonstrate how his model can be used to rationalize and synthesize the diverse results found in widely varying institutional contexts. He also shows how observed wage distributions from before and after a minimum wage change can be used to determine if the change was welfare-improving. More ambitiously, and perhaps controversially, Flinn proposes the construction and formal estimation of the model using commonly available data; model estimates then enable the researcher to determine directly the welfare effects of observed minimum wage changes. This model can be used to conduct counterfactual policy experiments—even to determine “optimal” minimum wages under a variety of welfare metrics.

The development of the model and the econometric theory underlying its estimation are carefully presented so as to enable readers unfamiliar with the econometrics of point process models and dynamic optimization in continuous time to follow the arguments. Although most of the book focuses on the case where only the unemployed search for jobs in a homogeneous labor market environment, later chapters introduce on-the-job search into the model, and explore its implications for minimum wage policy. The book also contains a chapter describing how individual heterogeneity can be introduced into the search, matching, and bargaining framework. [from publisher web site]

Cambridge, MA: MIT Press. 306 pages
ISBN 9780262013239 HD4917 .F58 2010

Workplace Issues Today: Swaziland teachers subdued by police

On Wednesday, police in Swaziland fired tear gas and water cannons at teachers planning to march on the country’s capital. The protests are being led by teachers and other public servants, many of whom are angry at the government’s plan to freeze salaries and sell government owned companies. Police have beaten and arrested protesters, and a planned protest on Tuesday did not happen because of police actions. The protest would have marked 38 years since political parties were banned and the country’s constitution was abandoned. The government has not commented on the protests.

See “Swazi police fire tear gas on teachers for 2nd day,” by Jenny Gross, The Associated Press, Apr 13 2011 (SD)

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Workplace Issues Today: Chicago workers rally on Saturday

Thousands of workers gathered in Chicago on Saturday to show support for workers in Wisconsin and other sates around the country. The rally goers tied their event to the April 4th anniversary of Martin Luther King Jr., and to other events around the country by chanting ‘we are one’. The rally was part of a national campaign being organized by the AFL-CIO and other groups, entitled “We Are One”. Illinois workers said that they were supporting workers around the country, and sending a message that they would not take it in Illinois.

See “Thousands gather for Chicago pro-union rally,” by Vikki Ortiz Healy, Chicago Tribune, Apr 11 2011 (SD)

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