This Writer Thinks San Francisco’s Dilemma Could Affect the Nation

By combining the ideal that every working man and woman is entitled to a living wage of at least $15 an hour with the justice of requiring those who would substitute automation for human labor to forfeit a penalty, California may drive many businesses out of state and force many others to close. Or so thinks this writer for The Wall Street Journal.
 
 
 Fully-automated Amazon distribution center warehouse

Amazon recently received proposals from cities hoping to host its second headquarters. A number of California localities—including Los Angeles, Sacramento, Pomona and Chula Vista—were in the mix. But the tech titan should tread carefully in the Golden State, where policy makers are studying punitive measures against companies that use workplace robots.

San Francisco City Supervisor Jane Kim during an interview at City Hall.  Photo: Jeff Chiu/Associated Press

The latest example is a statewide campaign launched this fall by Jane Kim of the San Francisco Board of Supervisors. Ms. Kim intends to raise money to support a statewide ballot measure that would penalize private enterprise for embracing automation in the workplace, as Amazon has done in its warehouses.

“The idea is simple: if an employer replaces a human worker with a robot or algorithm, he or she would pay a tax,” according to the “Jobs of the Future Fund” website. It continues, “If we can expect millions of Californians may lose their job, it is our responsibility to prepare now through a modest tax on the robots and algorithms taking their place.

While Ms. Kim would like to tax the robots, some of her colleagues would prefer to eliminate them. Earlier this year San Francisco Supervisor Norman Yee proposed a ban on delivery robots. “Our streets are made for people,” he proclaimed. In an interview, Mr. Yee said he was concerned that “many delivery jobs would disappear” if such a ban were not enacted. He later amended the proposed ordinance to create a robot permitting process with geographic restrictions.

The workplace trend toward self-service and automation has indeed made some occupations obsolete. Customers have been accustomed to bagging their own groceries for at least a decade. Restaurant chains such as McDonald’s and Panera Bread are now rolling out kiosks that allow customers to place their own orders. And the automated delivery devices targeted by Mr. Yee will render some delivery jobs obsolete.

 Employees displaced by technology might appreciate that these San Francisco politicians are concerned, but an apology might be more appropriate. Over the past few years, San Francisco in particular, and California in general, has increased the cost to hire and train employees at risk of being automated. The minimum wage will rise to $15 an hour in San Francisco in 2018. The rest of California will get there four years later. On top of San Francisco’s hourly wage mandate are requirements for health care, paid leave and employee scheduling.

These added costs give employers with already slim profit margins a strong incentive to automate or embrace self-service. In an interview with Forbes, the founder of a delivery robot company linked his product’s value proposition to a rising minimum wage: “At something like $10 per delivery, the majority of citizens will not use [human delivery]. It’s too expensive.”

The empirical evidence supports the anecdotes: An August study published by the National Bureau of Economic Research linked a rising minimum wage to an increase in unemployment for workers in jobs that require a large number of routine tasks. The authors reported that it wasn’t just service-industry jobs at risk. A rising minimum wage also had a negative effect on job opportunities for older, less-skilled employees in manufacturing.

Instead of spurring self-reflection among advocates for new labor mandates, these consequences have inspired them to propose new laws to solve the problems caused by old ones. Consider the irony: San Francisco voters were promised in 2014 that the minimum-wage initiative backed by Ms. Kim would increase consumer spending by north of $100 million—without affecting employment. Now money from the new robot-tax proposal will be used to offset a reduction in job opportunities, in part caused by the rising minimum wage.

These misconceptions put the livelihood of employers and employees at risk. Mr. Yee’s suggestion that a ban on delivery robots would help save drivers’ jobs is a dangerous confusion of consequence and cause. If customers are unwilling to underwrite a $15 hourly wage for food delivery, and employers are prohibited from embracing an automated alternative, they’ll either stop delivering food or close their doors.

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Kitchen workers in a California restaurant

This is already happening in San Francisco. A study this year from Harvard Business School and Mathematica Policy Research economists found an increase in the closure of median-rated restaurants associated with the city’s rising minimum wage.

Automation can’t be stopped, and it will change more than the service industry. Earlier this year a PricewaterhouseCoopers report estimated that nearly 40% of U.S. occupations are at a high-risk of automation in the next two decades. But states like California are accelerating the trend by creating labor-cost mandates that exceed the productivity of employees to which they apply. It’s futile to try to resist the downward slope of the labor demand curve. Instead California’s do-gooder legislators should study up on the law of unintended consequences.

Mr. Saltsman is managing director at the Employment Policies Institute.

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Denying Ex-Prisoners Jobs Robs Both Applicant and Market of Needed Work – Part Four

This is the conclusion of the four-part article on men with prison terms who have difficulty getting work after they are released.

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Jeffrey Menteer, who is 26 and lives in northwestern Pennsylvania, has applied for 15 jobs since June, when he completed a six-month prison term for a gun possession charge. A company that makes screen doors told him it might hire him after he gets off parole in October. Other than that he has found nothing. He said his criminal record was making it hard to find work.

“Between that and my race, black living in a white town, it’s tough,” he said.

He worked steadily as a logger for about five years before he was arrested. He made about $800 a week except in the spring, the off-season for the tree-cutting business. Now he lives with his parents, and the only money he makes is from occasional work shoveling snow.

“I don’t really blame them, but I wish they’d be a little more open-minded,” he said of local employers. “People do change.”

These concerns, and a wave of stories like Mr. Menteer’s, have catalyzed efforts to legislate protections.

The first “fair chance” law was passed by Hawaii in 1998. The law prohibits most private employers from inquiring about criminal history until after making a conditional job offer. Then the offer can be revoked only if the offense is relevant.

In just the last few years, the list of jurisdictions with similar laws has expanded rapidly, although the details vary: Some apply only to public sector jobs, others allow background checks at earlier stages in the hiring process, and they all include long lists of exemptions.

Still, the trend is clear enough that several of the nation’s largest employers, including Walmart, Home Depot and Target, have also stopped asking about criminal records at the beginning of the job application process.

Breaking the Cycle

The current debate, however, is largely about mulligans: giving people a second chance after a fairly isolated mistake. It does not address the underlying cycles of crime and incarceration that plague many men in lower-income communities.

Gregory Payne, 52, worked for a company that made insurance manuals in Santa Monica, Calif., after graduating from high school. He said he lost the job when he needed care for a daughter who was ill.

“I had two kids and an apartment, and the only fast money I could see was dealing drugs,” he said. He was caught, went to prison, got out, said he couldn’t find work and returned to dealing. He served 16 months, then three years, then another three years and a final four years on top of that.

“You keep doing the things that get you the money because you can’t get other jobs,” he said.

About seven years ago, he left his life in Venice, on the PacificCoast, and moved with a newborn son to California City, about 100 miles inland. He said he hadn’t used or sold drugs since moving, but employers don’t seem any more interested.

“Your record hurts you, man,” he said. “In certain cases, I understand. They got a right to say no if you’re stealing and robbing people. I wouldn’t hire you myself. But people who went up for drugs?”

Last year, California passed a “ban the box” law but, at least for Mr. Payne, it came too late. He qualified for federal disability benefits two years ago and said he had no immediate plans to seek work.

Mr. Mirsky is more hopeful that New Jersey’s new law will help him find work.He says he hopes that he has hit bottom. In November a friend put him in touch with an agency that places workers in short-term jobs.

He said that most of the other men also have criminal records. He worked five days at a brewery, a half-day at a coffee plant and a few weeks at the dairy. When that job ended, the company liked him enough to offer him a second temporary job.

But on the January morning he was scheduledto start, just minutes before he planned to leave the house, the police arrested him again on a new charge of not paying child support.

This time he went quietly, and the judge let him go. And the dairy, after a few phone calls, said he could start the next day. It felt, Mr. Mirsky said, like the first lucky break he’d had in more than four years.

This concludes the article on ex-prisoners.

Denying Ex-Prisoners Jobs Robs Both Applicant and Market of Needed Work – Part Three

The continuation of a four-part article about what appears to be the unfair treatment of men and women after being released from prison, often for non-substantial crime.

 

Lucia Bone worries that background checks are getting a bad rap. Ms. Bone is the founder of a nonprofit called Sue Weaver Cause that urges employers — particularly those that send workers into homes — to check the backgrounds of new hires and to conduct regular checks on existing employees. She says that many companies are not being careful enough.

The nonprofit is named for her sister, Sue Weaver, who was raped and murdered in 2001 after she hired a local department store in Orlando, Fla., to clean the air ducts in her home. The two men sent to perform the work both had criminal records, but the store had not ensured that its subcontractor conducted a background check. A few months later, one of those workers returned, killed Ms. Weaver, then set her house on fire.

“I very strongly believe that everyone has the right to work, but not every job is right for everyone,” Ms. Bone said. “It is the employer’s responsibility to protect their business, their employees and their customers.”

The ready availability of criminal records databases has fueled the perception that it is irresponsible for employers to ignore available information. Local governments increasingly put criminal records online, and private companies like HireRight, Sterling BackCheck and LexisNexis Risk Solutions aggregate those records, offering almost instant results. In the early 1990s, less than half of companies routinely checked criminal histories. Now relatively few refrain.

“Criminal background screening is an important tool — nearly the only tool — that employers have to protect their customers, their employees and themselves from criminal behavior,” Todd McCracken, president of the National Small Business Association, testified before a congressional committee last year. Local, state and federal governments have embraced the same logic, writing background checks into professional licensing requirements and post-9/11 security regulations.

These policies affect a growing number of people. About 10 percent of nonincarcerated men had felony records in 2010, up from 4 percent in 1980, according to research led by the sociologists Sarah Shannon of the University of Georgia and Christopher Uggen of the University of Minnesota. The numbers are much higher among African-American men: About 25 percent of nonincarcerated black men had been convicted of a felony, up from 9 percent in 1980.

Christopher Uggen of the University of Minnesota.   Credit Tim Gruber for The New York Times

The problem with criminal background checks, in Mr. Uggen’s view, is a lack of deliberation about what employers should be looking for. Some employers ask about convictions for felonies; some ask only about narrow categories of felony like violent crimes or sex crimes. Others ask about any arrest whatsoever. “We haven’t really figured out what a disqualifying offense should be for particular activities,” he said.

Mr. Uggen was himself arrested few times as a Minnesota teenager for fighting and other minor sins but, when he submitted his college application to the University of Wisconsin, he was not asked and he did not tell. Now a professor, he said that some of his own students were not able to escape the past so easily.

Colleges routinely ask applicants about criminal history. So do landlords.

“For somebody of my generation who had a brush with the law, they were able to quickly put it in the rearview mirror and move on,” said Mr. Uggen, who is 50. “Now I have graduate students who maybe 10 years ago they were convicted of a crime and for them to try to get an apartment, it’s a huge barrier.”

The quality of the information used in background checks is another cause for concern. One of the most common problems is that databases may include arrest records without any indication of whether a person was convicted.

In 2008, for example, the government began to check the backgrounds of 1.2 million workers at the nation’s ports. A law passed after the 9/11 terrorist attacks mandated the exclusion of anyone with a conviction in the last seven years, and 59,000 workers were excluded as a result. But 30,000 of those workers filed appeals arguing their records were inaccurate, and in 25,000 of those cases, a more careful examination found no evidence of a conviction, according to a subsequent review by the Government Accountability Office. That’s worth repeating: When the background check system identified a felon, it was wrong at least 42 percent of the time.

And the United States Equal Employment Opportunity Commission warned in 2012 that the systematic exclusion of people with criminal records was effectively a form of discrimination against black men, who were disproportionately affected. It has filed lawsuits charging such discrimination by companies including BMW, Dollar General and Pepsi.

To be continued 

Denying Ex-Prisoners Jobs Robs Both Applicant and Market of Needed Work – Part Two

Michael Mirsky in the New Jersey home, now in foreclosure, that he bought in better days. Since pleading guilty to resisting arrest, he has been unable to find steady work so he can start rebuilding his life. “How can I pay child support if I can’t get a job?” he asked. CreditRichard Perry/The New York Times

Mr. Mirsky, 43, made a six-figure annual salary as a phone line technician in the decade before he lost his job in July 2012. He was fired after clashing repeatedly with a supervisor. The company declined to comment.

He spent a few months searching for a new job in his old industry, but there are not a lot of other companies in central New Jersey hiring people to repair copper phone lines. So in January 2013 he trained at a local community college as a heating and air-conditioning specialist. After graduating in December 2013, he was offered a chance to join the Pipefitters Union.

In the meantime, however, he was living on savings and gifts from friends. A woman from his church delivered occasional meals; a friend tucked $50 into a Thanksgiving card; another man hired him to unload a truck at his restaurant. He lived in a basement apartment in an old house in Port Murray, N.J., he bought in better days, beneath the ruins of his ambitious renovation plans. When I visited in January, the winter wind whistled through the broken windows and unfinished walls upstairs. Animal droppings speckled the floors. A stainless steel range and refrigerator sat in their original shrink-wrap. He had not paid his mortgage in three years and he was battling to prevent, or at least delay, foreclosure.

He also fell behind on child support payments, and under New Jersey law a warrant was automatically issued for his arrest. He says he knew nothing about it until police came to his home in June 2014. According to the police report, Mr. Mirksy struggled, and the officers knocked him down, handcuffed him and charged him with resisting arrest.

It was the first time that Mr. Mirsky had ever been arrested. A few months later, he pleaded guilty to a single felony. The immediate penalty was just $411 in court costs. The enduring problem is that he has a criminal record.

The Pipefitters Union had arranged a series of job interviews for him in May, June and August 2014. He also submitted about 30 applications to other employers last year, and received a couple of interviews, but no offers.

He is convinced nothing has panned out because of his legal troubles — the warrant, the arrest and the conviction.

“I’m 43 years old, not recently employed, and that doesn’t look great,” he said. “But mostly they don’t want the heartache.”

Of course, people rarely find out why they didn’t land a particular job. For the last several years, job applicants have vastly outnumbered job openings. Being fired from a previous job doesn’t help. And the issues that land people in legal trouble may also make them less attractive as applicants. But Ms. Pager, the Harvard sociologist, has found in her research that having a criminal record by itself is often a significant impediment.

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In 2001, Ms. Pager sent pairs of black men and white men to apply for low-wage jobs at 350 businesses in the Milwaukee area. She picked sets of men who looked alike and were comparably well spoken and she gave them similar résumés — education, employment history — except that one member of each pair was told to claim that he had served 18 months in prison for a felony drug conviction.

She repeated the experiment in New York in 2004, sending pairs of “well-spoken, clean-shaven young men” to apply for 250 different jobs.

In both cases, she found men who reported criminal convictions were about 50 percent less likely to receive a callback or a job offer. The difference was significantly larger in the black pairs than in the white pairs. White employers seemed to show more sympathy for the white applicants, Ms. Pager said, and most of the employers were white.

Employers seemed to use the reported convictions as “a proxy for reliability and trustworthiness and a broader range of concerns beyond simply whether they would be aggressive,” she said. “Faced with a large number of applicants, this was one easy way of weeding out applicants.”

To be continued

Denying Ex-Prisoners Jobs Robs Both Applicant and Market of Needed Work – Part One

This is Part One of a very long article we found in The New York Times archives about people with a prison record (mostly men) who cannot get a job. They are caught up in a vicious cycle from which it is difficult to escape. Often the charge behind their imprisonment was minor—a result of poverty—and might easily have been dismissed. 

Furthermore, many of these individuals possess skills that answer needs of our job market. Thus both worker and employer lose out. The situation described in this article from two years ago is unchanged today.

Because of its length we have presented this article in four separate blogs.

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Michael Hugh Mirsky landed a temporary job in December rolling stacks of crated milk and orange juice to the loading docks at a commercial dairy in central New Jersey. He’s not making much, and he doesn’t know how long it will last, but after 30 months of unemployment, he counts himself lucky. Mr. Mirsky is a convicted criminal, and work is hard to find.

A series of unfortunate events that began in 2012 when Mr. Mirsky lost a job as a Verizon technician culminated last year in a guilty plea for resisting arrest. He is facing the foreclosure of his home; his church has told him that he cannot serve as an usher; he is thousands of dollars in arrears on child support payments for his 8-year-old daughter. Even as the economy improves, Mr. Mirsky has been unable to find a permanent position so he can start rebuilding his life.

“Even your lower-paying fast-food jobs are now doing background checks,” he said. “How can I pay child support if I can’t get a job?”

Attorney General Loretta E. Lynch highlights in 2016 the difficulties faced by inmates — many of them low-risk drug offenders, officials say — as they return to society.

The share of American men with criminal records — particularly black men — grew rapidly in recent decades as the government pursued aggressive law enforcement strategies, especially against drug crimes. In the aftermath of the Great Recession, those men are having particular trouble finding work. Men with criminal records account for about 34 percent of all nonworking men ages 25 to 54, according to a recent New York Times/CBS News/Kaiser Family Foundation poll.

The reluctance of employers to hire people with criminal records, combined with laws that place broad categories of jobs off-limits, is not just a frustration for men like Mr. Mirsky; it is also taking a toll on the broader economy. It is preventing millions of American men from becoming, in that old phrase, productive members of society.

“Prior to the prison boom, when convictions were restricted to a smaller fraction of the population, it wasn’t great for their rehab potential but it wasn’t having a huge impact,” said Devah Pager, a Harvard professor of sociology. “Now such a large fraction of the population is affected that it has really significant implications, not just for those people, but for the labor market as a whole.”

Employers, of course, have always taken an interest in the histories of prospective employees. Banks do not want to hire embezzlers; trucking companies do not want drunken drivers. Schools and security companies don’t want to hire criminals of any kind. But the easy availability of online databases lets employers investigate everyone — indeed, it makes hard to justify not looking. Surveys show roughly nine in 10 United States employers check databases of criminal records when hiring for at least some positions. Some focus solely on felony convictions; others also consider misdemeanors or arrests.

Rising concern that background checks are being used to systematically exclude applicants with criminal records is fueling a national “ban the box” movement to improve their chances. The name refers to the box that job applicants are sometimes required to check if they have been convicted of a felony or a misdemeanor. Fourteen states and several dozen cities have passed laws, mostly in recent years, that generally require employers to postpone background checks until the later stages of the hiring process.

Georgia became the latest state to join that list when Gov. Nathan Deal signed an executive order Monday. It described the new policy as a matter of fairness and a way to strengthen the state’s economy by expanding the pool of workers. New Jersey passed its own “ban the box” law last year. It is scheduled take effect March 1. So help is on the way for Mr. Mirsky, too.

To be continued

Homeless but not Hopeless

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Evening walks along the boardwalk in Coney Island brought Keith Ford a modicum of peace when he was homeless. The dulcet sounds of crashing waves, he said, countered his anxiety during that turbulent time.

After his meditative ambling, Mr. Ford would board an F train and ride it back and forth for the remainder of the night. He stole sleep in one-hour spurts, waking when the subway cars reached the end of the line, then hopping aboard a train going the opposite direction.

Mr. Ford’s transience began in fall 2013 while he was a senior in high school. He and his mother were not getting along, Mr. Ford said recently, and he could no longer live in her home. Despite his precarious circumstances, he remained dedicated to his education.

“I knew I wanted to finish high school,” Mr. Ford, now 23, said. “That was a top priority — get my diploma, keep moving.”

One of his teachers at Voyages Preparatory High School in Queens took notice of his sullenness and encouraged him to open up about his troubles. Staff members at the school then helped Mr. Ford find housing. That November, he entered Safe Haven, now called Sheltering Arms, a transitional housing center in Queens.

Mr. Ford graduated from high school the following summer and began pursuing an associate degree in architectural technology, a subject that has always fascinated him, at Queensborough Community College.

In March 2015, he turned 21 and aged out of the shelter. Mr. Ford once again found himself unmoored. He resumed his erstwhile evening ritual, though not every night was spent by the ocean or in transit. He sometimes stayed with friends and lived briefly with his father. But the instability prompted him to drop out of college, Mr. Ford said.

Soon after, he learned about Green City Force, which prepares young people from low-income families for careers in the renewable energy industry. It is a partner of the Community Service Society, one of the eight organizations supported by The New York Times Neediest Cases Fund.

Green City Force is also an AmeriCorps program, which Mr. Ford said most appealed to him. “I thought that since it counted as national service, I could do something beyond myself,” he said.

He started the six-month job training program in early 2016. “It was just a phenomenal experience,” Mr. Ford said. “I managed to commit most of my time to service despite what I was going through.”

During this time, Mr. Ford was still without a permanent home. He decided during his job training that having a driver’s license would lead to better employment opportunities. His goal was to earn a salary that would allow him to afford a place of his own.

Community Service Society used $170 from the Neediest Cases Fund to pay for his driving lessons last year. Lacking access to a car to practice, he failed his road test but hopes to retake it soon.

When Mr. Ford finished his training at Green City Force, he began a six-month apprenticeship with the state program EmPower New York, conducting in-home energy audits.

In January, he landed a job as a business development associate at another energy efficiency company, BlocPower. That month, Community Service Society used $116.50 from the fund for a monthly MetroCard so he could commute for work.

Mr. Ford with a co-worker at BlocPower in Brooklyn. He began a new job last month. Credit Michael Noble Jr. for The New York Times

Mr. Ford continues to pursue work in energy efficiency. Late last month, he took a new job as a program coordinator at East New York Restoration Local Development Corporation.

His financial security is better than it has ever been, Mr. Ford said, but he still feels unsteady.

“Stable for me will be when I can turn a key into something that’s mine,” he said. “I can walk inside of it and lie down and not worry about anyone telling me to get out or that my time is up.”

He is confident that the pieces of his life will fall into place. When he first became homeless, he said, he made a vow never to succumb to cynicism.

“I believe that through hard work and dedication, I can be where I want to be,” Mr. Ford said. “I would never want to look at any situation of adversity as ‘I can’t make it through.’”

At Green City Force, he met his fiancée, Tanaeja Wright, and they plan to wed in 2020. The couple are living with her family in East New York, Brooklyn, while they search for their own apartment.

“I long for a space to call my own,” Mr. Ford said. “And I’m willing to accept the responsibly that comes with it.”

Mr. Ford said he would like to return to college someday. And his affinity for architecture has become more personal.

“This entire time, maybe I was always searching for a livable space to call home,” he said. “And why not be the one to make it?”

The History of Migrant Farm Workers in California—Where Will They Go?

Few American industries are as invested in the decades-long political battle over immigration as agriculture. Paying low wages for backbreaking work, growers large and small have historically relied on immigrants from south of the Rio Grande. These days, over one-quarter of the farmhands in the United States are immigrants working here illegally.

This is how the growers will respond to President Trump’s threatened crackdown on immigration: They will lobby, asking Congress to provide some legal option to hang on to their foreign work force. They will switch to crops like tree nuts, which are less labor-intensive to produce than perishable fruits and vegetables. They will look for technology to mechanize the harvest of strawberries and other crops. And they will rent land in Mexico.

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download   French artist Jean François Millet’s famous 19th century painting, “L’Angelus”—a surprising resemblance. Both make statements about the nature of agricultural labor, one in this century, one in the other. “Plus ça change, plus c’est la même chose,” as the French say.

 There is one thing they won’t do. Even if the Trump administration were to deploy the 10,000 immigration agents it plans to hire across the nation’s fields to detain and deport farmhands working illegally, farmers are very unlikely to raise wages and improve working conditions to attract American workers instead.

“Foreign workers will always be harvesting our crops,” Tom Nassif, who heads the Western Growers Association, told me. The only question for policymakers in Washington is whether “they want them to be harvesting in our economy or in another country.” If they choose the latter, he warned, they might consider that each farmworker sustains two to three jobs outside the fields.

Most of what we know about the effect of immigration on American-born workers is based on studies of what happens when immigrants arrive. Almost 30 years ago, the economist David Card found that the Mariel boatlift of 1980, in which more than 100,000 Cubans fleeing the island landed in Florida, did little damage to either the employment or the wages of the Americans they competed with.

A flurry of research since then has tried to find fault with that counterintuitive conclusion. Yet despite the claims from the Trump administration that immigrants have decimated the working class, Mr. Card’s analysis has emerged pretty much unscathed: With few exceptions, economists agree that even less-educated natives suffer little when immigrants arrive.

What if the shock goes the other way, though? We know less about what happens when immigrant workers are kicked out. But a series of studies over the past year are also coming to something of a consensus: Expelling immigrants does not open opportunities for workers born in the United States, either. Rather, the shock leaves them worse off than when the immigrants were here.

In a forthcoming study, Giovanni Peri and Annie Laurie Hines of the University of California, Davis, take advantage of an underappreciated fact of American immigration policy: President Barack Obama went on a deportation spree in his first term. The number of unauthorized immigrants detained far from the border — on the job, at home, in public spaces — more than tripled, to nearly 350,000 from 2007 to 2011, after which Mr. Obama changed tack to focus more narrowly on unauthorized immigrants with criminal records.

The researchers found that employment and wages in states like Arizona, where apprehensions by Immigration and Customs Enforcement surged, did no better than in states where apprehensions changed little, like Delaware, Pennsylvania and West Virginia. The results suggest that in regions where enforcement intensified the most, the wages of American-born workers actually did worse.

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The argument of Professor Peri and Ms. Hines is intuitive. Raids and deportations are disruptive. They can scare away other workers — leaving employers scrambling to maintain production. When immigration agents raided a mushroom farm in Pennsylvania this year, they scared away workers in nearby farms — which had to cut their own production.

These sorts of events can increase uncertainty among businesses and depress investment. “The uncertainty and the disruption of labor market activities caused by the surge in apprehensions is likely to have generated the departure of firms and the relocation of production,” the researchers wrote. Think of California avocado farmers checking out plots in Michoacán.

One could argue that growers will eventually get over the shock of immigration raids. Once the dust settles, they may have more jobs at better wages for American workers. But the evidence is not promising.

Another study published last month by Professor Peri and two colleagues examined the effect of forced repatriation of Mexicans and Mexican-Americans in 893 cities between 1929 and 1934. It was sold as an effort to reduce unemployment and give jobs to Americans who had been clobbered by the Great Depression. But unemployment rates for American-born workers were actually higher in cities that repatriated more Mexicans — a consequence that persisted until 1940.

As my colleague Binyamin Appelbaum has noted, a separate study this year looked at the end of the Bracero program in 1964, when Mexican farmhands who had been invited to work the fields in place of American men shipped off to World War II were asked to leave. It found that the exclusion of Mexican farmworkers “had little measurable effect on the labor market for domestic farmworkers.” Instead, growers mechanized some crops and dropped crops that remained labor intensive.

 Another exclusion seems to be at hand. Immigration enforcement has become increasingly severe since Mr. Trump took office. The Department of Homeland Security is no longer focused on criminal immigrants, as it was at the end of the Obama administration, and is casting a wider net. Immigration and Customs Enforcement said its agents had made 43 percent more arrests of unauthorized immigrants than they did last year. From Jan. 22 through Sept. 2, there were 28,000 arrests of “noncriminal immigration violators” — three times as many as during the same period in 2016.

It’s not only businesses that are brainstorming about how to navigate the changing immigration politics. The hotel employees’ union, for instance, wants labor contracts to assert that employers will not allow ICE agents into workplaces without warrants. Hoteliers and the union are talking about jointly training supervisors about what to do when immigration authorities show up.

From California to Florida, they are trying to figure out how to respond if, come January, Haitians lose the temporary protected status that allows them to work in the United States. In that case, “1.1 to 1.2 million people could become undocumented overnight,” said María Elena Durazo, vice president for civil rights, diversity and immigration with Unite Here, the hospitality workers’ union.

The Trump administration will cast these efforts as a sign of success: immigrants cowering before an American administration finally willing to stand up for its own.

But American workers might not want to hold their breath as they wait for the great new jobs to appear. Consider agriculture. There were 30,000 fewer workers in the industry this past spring than there were a year before, according to government statistics. Yet for all the complaints from farmers about labor shortages that forced them to pay more, the wages of field workers failed to keep up with inflation.

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The Bracero Program

Here is where the importation of outside labor to the United States for fruit picking began:

   

The Bracero program (1942 through 1964) allowed Mexican nationals to take temporary agricultural work in the United States. Over the program’s 22-year life, more than 4.5 million Mexican nationals were legally contracted for work in the United States (some individuals returned several times on different contracts). Mexican peasants, desperate for cash work, were willing to take jobs at wages scorned by most Americans. The Braceros’ presence had a significant effect on the business of farming and the culture of the United States. The Bracero program fed the circular migration patterns of Mexicans into the U.S.

Several groups concerned over the exploitation of Bracero workers tried to repeal the program. The Fund for the Republic supported Ernesto Galarza’s documentation of the social costs of the Bracero program. Unhappy with the lackluster public response to his report, Strangers in Our Fields, the fund hired magazine photographer Leonard Nadel to produce a glossy picture-story exposé. Presented here is a selection of Nadel’s photographs of Bracero workers taken in 1956.

    

Shortage of Truck Drivers: Is This Good News or Bad?

 

 

 

 

 

We’ve written and blogged a great deal about truck drivers in the past because truck driving is one of the few occupations a young man or woman can look forward to doing well in without having to go to college (see the salaries in the following article). But from this article we learn that driving a truck does not offer a lifestyle that attracts young Americans, in spite of rising wages. 

Long-haul trucking  has also been threatened by automation (imagine the big rigs on American highways becoming driverless—what a great Spielberg movie that could make). But, as you will learn from the news item that follows this article, long-distance hauling is limited for the time being, even in Elon Musk’s futuristic vision, by battery size. 

By JENNIFER SMITH Oct. 25, 2017 for The New York Times

Trucking companies are worried about finding enough drivers now that the freight market is recovering.

Shipping demand is strengthening after a roughly two-year slump, as manufacturing activity expands and retailers stock up in advance of the holiday season. Meanwhile, fleets are reporting trouble recruiting qualified drivers to haul those loads. Some are raising wages even before they secure rate increases from shippers.

Long-haul truck drivers often hop from one fleet to the next in search of better pay or other benefits, such as schedules that permit them to spend more nights at home. They also tend to be older than the general workforce, fueling concern about driver supply as more truckers near retirement age and younger people enter other fields.

A tight employment market compounds the issue, as the construction and energy sectors draw from the same labor pool. Long-haul truckers make on average about $55,000 a year, compared with the roughly $80,000 to $100,000 they could earn driving for the oil-and-gas industry, said Bob Costello, chief economist with the American Trucking Associations, an industry group.

This year “driver shortage” ranked as the trucking industry’s top concern for the first time since 2006, according to an annual survey released Monday by the American Transportation Research Institute. Nearly 40% of respondents ranked driver supply among their top three concerns, according to the industry research group’s report.

“This is as tight a market as we’ve seen in 25 years, and we expect it to tighten further,” said Derek Leathers, chief executive of Werner Enterprises Inc., a large truckload carrier based in Omaha, Neb. “Demographics are working against us.”

Over the past two years, Werner has boosted wages by about 15%, one of a number of steps to aid driver recruitment and retention. The company has also spruced up its equipment and terminals. . . . .

J.B. Hunt Transport Services Inc., one of the biggest U.S. carriers, said earlier this month that rising driver pay, a decline in fleet size and an increase in trucks lacking drivers weighed on third-quarter results in its truckload division. That unit had a 5% drop in revenue from the year-earlier period, though operating income increased 12%.

Companies are increasing wages “and they should,” said Mr. Costello. “But it’s about more than pay. It’s about the lifestyle.”

The ATA says the driver shortage is leading to delivery delays, and estimates the shortfall has yet to peak this year. Carriers will need to hire about 898,000 new drivers over the next decade as more truckers retire and the industry expands, according to the group.

 

Tesla’s Big Rig

By MARC VARTABEDIAN  Aug. 24, 2017 for Business News

[Elon] Musk, a quirky billionaire whose transportation ambitions include colonizing the planet Mars, has long delighted in defying conventional wisdom.  At Tesla’s annual meeting in June, he repeated his promise of a battery-powered long-haul big rig.

“A lot of people don’t think you can do a heavy-duty, long-range truck that’s electric, but we are confident that this can be done,” he said.

While the prototype described by [Scott] Perry [an executive at Miami-based fleet operator Ryder System] would fall well short of the capabilities of conventional diesels, Musk may well have found a sweet spot if he can deliver. Roughly 30 percent of U.S. trucking jobs are regional trips of 100 to 200 miles, according to Sandeep Kar, chief strategy officer of Toronto-based Fleet Complete, which tracks and analyses truck movement.

A truck with that range would be able to move freight regionally, such as from ports to nearby cities or from warehouses to retail establishments.

“As long as (Musk) can break 200 miles he can claim his truck is ‘long haul’ and he will be technically right,” Kar said.

Interest in electric trucks is high among transportation firms looking to reduce their emissions and operating costs. Electric motors require less maintenance than internal combustion engines. Juice from the grid is cheaper than diesel.

But current technology doesn’t pencil when it comes to powering U.S. trucks across the country. Experts say the batteries required would be so large and heavy there would be little room for cargo. . . .

Battery weight and ability would limit a semi to a range of about 300 miles with an average payload, according to a paper recently published by [Venkat] Viswanathan and [Shashank] Sripad [of Carnegie Mellon University]. The paper thanked Tesla for “helpful comments and suggestions.” Tesla did not endorse the work or comment on the conclusions to Reuters.

A range of 200 to 300 miles would put Tesla at the edge of what the nascent electric truck industry believes is economically feasible, the researchers and industry insiders said.

New Rule from Consumer Financial Protection Bureau on Payday Loans Favors the Borrower

A small victory for the American working man and woman. But this is what it’s going to take—an aggregate of these small, incremental gains—to ultimately undo the enormous unfairness perpetrated on this country since the 1980s by a cabal of ruthless billionaires concerned solely with their own interests. We could start with an effort to reverse the recent Congressional defeat of a measure that would have allowed class action suits by consumers against bank malfeasance (which might have prevented Wells Fargo from committing its predatory offenses against its customers).

Since the federal Consumer Financial Protection Bureau opened its doors in 2011, the agency’s investigations and enforcement actions have returned more than $12 billion to auto buyers, homeowners, credit-card holders and other borrowers who were victimized by deceptive or predatory practices. Consumers who have been trapped in debt by the notorious payday lending industry will now get extra help from the bureau with a rule imposed this month.

These lenders advertise as “easy” the short-term loans that come due in two weeks. The borrower typically writes a postdated check for the full balance — including fees — or allows the lender to electronically debit funds from his or her checking account. The borrowers often take out another loan to pay off the first, falling to a cycle of increasing debt.

The bureau found in a 2014 study of about 12 million payday loans that only 15 percent of borrowers could repay the total debt without borrowing again within two weeks. Nearly two-thirds of borrowers renewed the loans — some more than 10 times — paying heavy fees that further eroded their financial standing. Strikingly, the bureau found that most people pay more in fees than they originally borrowed.

The new rule limits how often and how much customers can borrow. And lenders must take the common-sense underwriting approach, determining whether the borrower can pay the total loan and still meet living expenses.

Borrowers can take out one short-term loan of up to $500 without that test, as long as it is structured so that they are not automatically trapped into borrowing again. The rule also limits the number of times the lender can debit the borrower’s account, so borrowers can contest erroneous withdrawals.

The payday industry is predictably crying wolf, arguing that the new restrictions will dry up credit in some areas. In truth, payday loans will continue at lower profit margins — stripped of the debt trap. Beyond that, small banks and credit unions are beginning to realize that they can make money in the small-loan business without predatory tactics.

Payday industry leaders are urging Congress to overturn the rule through the Congressional Review Act, which lets lawmakers nullify regulations within 60 legislative days. But vulnerable lawmakers will be hesitant to vote for predatory lending tactics that drive people into poverty.

The Trump administration could undermine the regulations after the bureau’s director, Richard Cordray, leaves office or when his term expires next summer. Consumer advocates need to remain vigilant against that possibility.

Who’s Right, Trump or Desai? There’s a Discrepancy of $8200

By JIM TANKERSLEY Oct 17, 2017 for The New York Times

. . . Mr. Trump’s Council of Economic Advisers said in a report released on Monday that reducing corporate taxes could raise average household incomes by as much as $9,000 a year. The top end of that estimate was based on work by a trio of researchers, and on Tuesday one of them, Mihir Desai of Harvard, said Mr. Trump’s team had misread the research. The actual income gain implied by his study, he estimated, would be $800.

Mr. Trump’s economic team disagreed — saying Mr. Desai had erred in interpreting his own paper. [Imagine!]

Mihir Desai at Harvard

The Republican proposal, which still lacks key details, thus far includes what analysts project will be only modest reductions in income taxes for many middle-class Americans. But it reduces the top corporate income tax rate to 20 percent from 35 percent, a move that Mr. Trump and Republican leaders say will spark faster economic growth and higher profits. Their theory is that companies will pass those winnings on to workers by raising their pay.

That claim has already run into opposition from many economists, particularly liberal-leaning ones. It could prove a difficult sell politically, at a time when corporate profits are near record highs and polling suggests Americans are skeptical that the Republican plan will help average workers.

They are facing a lot of headwinds” in selling the plan, because Americans will not see it as a boon to the middle class, said Andrew Bates, a spokesman for the liberal opposition research group American Bridge, which is gearing up to oppose the Republican plan. “This plan is vulnerable, based on that landscape.”

As they prepare to release a full tax plan in the coming weeks, though, Republicans are pressing the argument.

“Fixing the business side of our tax code is really all about helping families and workers,” House Speaker Paul D. Ryan, Republican of Wisconsin, said last week. “Cutting the corporate tax rate means more jobs here in the United States. It will foster increased competition, which will directly drive up wages for our workers. Higher wages means bigger paychecks.” [What delusion—cutting the tax rate will do no such thing. Who is Speaker Ryan kidding—himself or the American worker?]

The parliamentary language in the resolution would allow Republicans to pass tax cuts that cost as much as $1.5 trillion over the next decade with only 50 votes in the Senate, not the 60 needed to overcome a filibuster. Republican leaders have said that without a budget, there will be no tax cut.

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President Trump at the Heritage Foundation

In a speech at the Heritage Foundation in Washington on Tuesday evening, Mr. Trump called on Congress to quickly pass “incredible tax cuts” that he said will allow individuals, big corporations and small businesses to keep more of the money they earn.

 

“Our tax plan will ensure that companies stay in America, grow in America and hire in America,” Mr. Trump told employees and supporters of the conservative organization. “We will lift our people from welfare to work, from dependence to independence, and from poverty to total, beautiful prosperity.”

The president urged the Heritage Foundation audience to help the administration put pressure on Republican lawmakers to support the tax cuts, saying that “you will see things happen like have never happened before. We will have employment. We will have jobs. We will have companies moving back into our country.” [All of these are pure presidential pipe dreams!]

He added: “Let’s give our country the best Christmas present of all: massive tax relief.”

Many economists, including ones who served Democratic presidents, agree that lowering corporate taxes could lead to higher incomes for workers. A few, such as Lawrence B. Lindsey, the former director of President George W. Bush’s National Economic Council, have estimated the Republican plan for corporate cuts could lead to income gains of the magnitude that Mr. Trump’s economists are projecting.

But other economists have criticized the Trump team’s estimates as well above what research supports. That includes Mr. Desai, a professor at Harvard Business School and Harvard Law School, who co-authored a study on corporate taxation that Mr. Trump’s Council of Economic Advisers drew upon for its estimate. The report said that a corporate tax cut would increase average household income by $4,000 per year on the low end to as much as $9,000 at the high end.

Mr. Desai, who wrote the study with Harvard’s C. Fritz Foley and James Hines Jr. of the University of Michigan, said his own estimates of the effect of such a rate cut was closer to $800 a year. “I’m a believer in corporate tax reform, and I’m a believer in corporate tax cuts, and I believe they would go to workers,” he said. “But I don’t believe those numbers add up.”

The chief of staff for the council, D.J. Nordquist, said in an email that the $800 estimate was “far” from the academic consensus on the effects of corporate tax reductions on workers. “It’s gratifying to see Professor Desai agrees with us that there is a need for corporate tax reform and that rate reduction is the best way to help the middle class,” she wrote. “But the CEA did not misinterpret the Desai, Foley, and Hines paper.”

Other economists have attacked the council’s estimates in harsher terms than Mr. Desai. Robert J. Shapiro, the chairman of the consulting firm Sonecon and a former economic adviser to President Bill Clinton, said on Tuesday that there was no evidence in United States history of lower federal corporate tax rates driving surges in investment or wages. The council’s mistake, he said, was “in believing that the corporate tax rate determines the investment rate. That’s just not true.”

Polling suggests middle-class Americans are not clamoring for corporate rate cuts, and that they do not expect the Republican plan to reduce their own taxes. Recent polls by ABC News and the Pew Research Center show a majority of Americans would prefer to raise, not cut, corporate taxes. . . .