Labor

In a recent tax reform hearing, Finance Committee Chairman Max Baucus (D-MT) noted that nearly 30 percent of all Americans in the workforce for 25 or more years have zero retirement savings. Meanwhile, Sen. Orrin Hatch (R-UT) noted that the average American will face over $200,000 in out-of-pocket post-retirement medical costs alone. “We should probably be expanding opportunities to save,” he said.
 
There is bipartisan agreement that too many Americans do not set aside sufficient resources to live comfortably in retirement. One needed policy response to this unfortunate situation would be to preserve and expand retirement programs through which many Americans save.  A useful structure is that of the S corporation employee stock ownership plan, or “S-ESOP,” which helps to generate billions of dollars in retirement savings each year for American workers. 

Boeing will deliver its first 787 Dreamliner airplane today. Bought by All Nippon Airways, the plane will be flown from Seattle to Japan. Heralded as the future of commercial air travel, as well as the future of the Boeing Corporation, the sophisticated carbon-composite aircraft has been plagued by problems of delay and quality control in the company’s increasingly complex global supply chain. Three years behind schedule, the cost of the Dreamliner has exceeded $32 billion, over double the usual development cost of a new airliner.

But it is not only delay and spiraling costs that have dampened celebrations over the delivery of the first $200 million plane. Since April 2011, Boeing has been embroiled in an intense, and very public, dispute with the National Labor Relations Board (NLRB) and Machinists union over its decision to build a $750 million, non-union assembly plant for the Dreamliner in South Carolina, rather than expand production at its long-established unionized plant in Everett, Washington, where the All Nippon plane was built.

The U.S. airlines are very supportive of recent initiatives led by President Obama to eliminate unnecessary, unproductive and costly regulation. The FAA-proposed rule that seeks to change how airlines schedule pilots is a classic and very troubling example of an ill-conceived regulation with a good intent that fails to meet its objective and will result in significant unintended consequences, including job losses.

We fully support revisions to this outdated rule that would actually improve safety. Unfortunately, the rule as proposed is not science-based nor is it supported by any data or research that would indicate it would improve what is in fact the safest form of transportation in the United States.
 
Leading experts in fatigue management agree that the rule is flawed in several ways and will not make air travel safer, especially in areas concerning schedule reliability, flight-time limits and strict limits on extensions of duty periods.
 
Some aspects of the proposal could even reduce safety. In addition, this proposal does not address the very different working environments of cargo and charter airlines compared with passenger airlines and if implemented, would put our carriers at a serious competitive disadvantage with their international counterparts for global business.

The question of just how to foster job growth in the United States has clearly moved to the center of public debate. Little noticed in this debate is the need to make a pronounced change to the federal regulatory framework governing the capital formation of small, start up and growth stage companies – enterprises that are fueling the majority of recent job growth.
 
Under the current regulatory framework governing initial public offerings (IPOs), companies must register their offerings in compliance with the registration provisions of the Securities Act of 1933 and separately the class of securities sold under the Securities Exchange Act of 1934 (Exchange Act), triggering an obligation to comply with a full complement of listed public company periodic reporting, governance and other regulations, including those imposed by the Sarbanes-Oxley and Dodd-Frank Acts.

The one-size-fits-all regulatory framework would apply the same level of regulation to a fully developed billion-dollar revenue company as it would apply to a development stage company with $10 million in assets. Many small growth companies can’t incur the cost of compliance that registration under the existing framework entails, and accordingly decide not to pursue an IPO.

President Obama’s call for cutting the deficit by $3 trillion includes the roll back of the Bush-era tax cuts on the top income tax brackets, a move expected to bring in about $800 billion over the next 10 years.  

As expected the defenders of the wealthiest two percent of taxpayers, such as Speaker John Boehner, trotted out their bogus criticism of the proposal saying that it hurts small businesses, the “job creators”.  

First, the data clearly shows that only 2 to 3 percent of tax filers reporting some income from a small business have family incomes of over $250,000 a year, the filers who would be impacted by the proposal.  This minority of “small business owners” consists largely of very successful attorney’s, physicians, hedge fund managers, K Street lobbyists, high-powered consultants, Wall Street bond traders and the country’s wealthiest millionaires.  An incremental tax increase on these Americans will not affect the number of employees they hire one bit.

But while the critics of President Obama’s plan are disingenuous as to who it would impact, at least they continue to remind the public that most net new jobs are in fact created by small business.  Now if they would only support proposals that directly target small business for assistance.

Employers across the nation are experiencing hardships in a time of economic uncertainty, trying to conduct business as usual with smaller work forces.  Those who employ members of the Guard and Reserve face even greater challenges, as they share their valuable military employees with our country during ongoing combat operations and widespread natural disasters. It is heartening to see the many Guard and Reserve employers remaining dedicated to supporting their service members and being cognizant of the value they bring to both the civilian workplace and our Nation’s security. Of these employers, 15 have been exceptional in their commitment to their military employees and have earned recognition by the Secretary of Defense for their efforts.

Secretary of Defense William Perry instituted the Secretary of Defense Employer Support Freedom Award in 1996 under the auspices of Employer Support of the Guard and Reserve (ESGR).  ESGR develops and promotes a culture in which all American employers support and value the military service of their employees.  One way ESGR champions this mission is by formally recognizing the contributions made by our nation’s most compassionate companies.  Each year, 15 employers, from businesses large and small, and the public sector, are honored with the Secretary of Defense Employer Support Freedom Award for their exemplary efforts on behalf of their Guard and Reserve employees. One of these outstanding employers is located here in Chantilly, Virginia.

Integrity Applications Incorporated (IAI) is a recipient of the 2011 Freedom Award and will be presented the award September 22, 2011 during a ceremony in Washington, D.C. IAI is veteran-owned business that actively seeks to hire veterans and current Guard and Reserve service members. Of the company’s employees, 44 percent are veterans, including four of the six members of the Board of Directors. IAI offers flexible work schedules to help reserve component members meet their drilling and military schooling obligations, and finds ways to support families of deployed service members.

If you haven’t heard of “E-Verify” before today, you’re probably not alone. It’s an electronic employment verification system, currently used by only 4 percent of employers. But that could change soon, with serious consequences for small businesses.


House Judiciary Committee Chairman Lamar Smith (R-Texas) is advancing a proposal to mandate E-Verify for every employer in the country. That means every business, large and small, would have to run every employee through a federal database to confirm his or her employment status.



It’s ironic that some of the same members of Congress who’ve been beating the drum to roll back “regulations” – mainly, environmental standards that have no negative impact on everyday small businesses and actually produce net benefits to the economy – are now proposing a new regulation that will have a direct impact and direct cost to every small business in the country.

A point of agreement: our immigration system is badly broken, and it’s doing a number on our businesses, our economy, and our country. But what’s the solution? Not mandating E-Verify.


Some Republicans in Congress may go along with re-authorizing the expansion of the so-called “Trade Adjustment Assistance” program, or TAA for short, next week, even though it amounts to another wasteful spending program that will further plunge our country into debt. TAA, a little-known program from the 1960s that is still alive today, offers workers who can claim that their jobs have been lost “to trade” additional benefits on top of already generous 99-week-long unemployment benefits.

A quick history lesson: President Obama, despite his history of opposing free-trade agreements as a Senator, has stated that he now favors passage of long-stalled free trade pacts with Colombia, Panama, and South Korea. Yet Congress can’t pass the measures until Obama submits them to Congress, and they are still languishing on his desk. That’s because the President has held the pro-growth agreements hostage unless Congress takes up TAA, and it’s likely he won’t submit them unless TAA is assured of passage.

To be clear, the Obama administration doesn’t just want to extend current TAA funding. They want to extend an expanded version of TAA that was passed into law as part of the President’s failed stimulus bill and that expired back in February reverting to its traditional levels which are in place currently. Today, TAA gives workers up to two years of support for job training, job search and relocation allowances, a refundable “health care tax credit” and a two-year wage insurance program that partly replaces workers’ earnings if they take a lower-paying job. Sound like a sweet deal? Remember that all you need to do to qualify for this bonanza - again, on top of your unemployment benefits - is prove that you have lost your job “to trade.”  

Outrage is in the air over concerns that companies are hiring only those who currently have jobs. Apparently, the nation is littered with “Unemployed need not apply” signs hanging from storefronts.
 
Advocacy groups argue that these affronts to human dignity have to go – and that new government regulations are the only way to protect out-of-work jobseekers. Taking their cue, Rep. Rosa DeLauro (D-Conn.) introduced legislation that makes it illegal for employers to discriminate against those without a job, and President Obama has even included the measure in his proposed American Jobs Act.
 
How did we get to the point where the problem became so serious and widespread that only onerous government intervention could solve it? Perhaps more importantly: Are we even actually at that point?

In honor of the latest dreary news that exactly zero net jobs were created in August, the corporate CEOs who ship our jobs overseas, and the budget cutters in Washington whose priorities lie elsewhere, let’s just rechristen the September holiday “Un-Labor” Day.

For nearly 14 million unemployed Americans, as well as nine million more who have had their paychecks and hours cut because of the economy, the idea of celebrating Labor Day this year is a cruel joke.

Labor Day was meant to honor American men and women who did the hard work and heavy lifting that built the world’s biggest, most productive and once prosperous economy.

Make no mistake, the contributions of American Labor – weekends, the eight-hour work day, child labor laws, a 40-hour week, workplace health and safety, all aspects of American life that we now take for granted – fully deserve the traditional Labor Day picnic and civic parade down main street.