Wages Part II

The Working Catholic
by Bill Droel

Back in 1992 New Jersey raised its minimum wage. Social scientists David Card and Alan Krueger studied its effects. Specifically, they compared fast food restaurants in New Jersey with others in adjoining Pennsylvania, where wages were not raised—a total of 410 restaurants. Their findings, published in the September 1994 issue of American Economic Review (www.aeaweb.org), showed no decrease for fast food employment and no loss of profit in New Jersey. This study is frequently used to bolster an argument for a higher minimum wage.
Now there is a study from Seattle. The municipal minimum wage there was raised from $9.47 to $11 in 2014. Earnings increased only slightly, the study shows. There was a small drop in employment. Subsequently, as called for in the original legislation, the municipal minimum went from $11 to $13. In consequence, the independent study says, employers cut back the weekly hours of minimum wage workers. The $2 hourly increase for affected workers was wiped out by their lost hours.
What to conclude? Well, first a little more data. There is another independent study of the Seattle wage increase. It, however, only looks at fast food. It predictably finds increase in food service wages. Yet employment in food service remains the same. This is about the same conclusion as the early 1990s study in New Jersey.
Possible conclusions:
 Fast food tolerates wage increases better than other minimum wage sectors?
 A gradual wage increase is better than a sudden jump?
 A state-wide increase is better than a municipal increase?
 The global economy is so fluid that wages and employment vary year-to-year?
Both research teams looking at Seattle note that the matter is not settled. In fact, per the original legislation, Seattle’s minimum will go from $13 to $15. Studies are sure to follow.
There is meanwhile an intriguing experiment occurring in and around Ithaca, New York; located at the bottom of Cayuga Lake and home to an Ivy League school. The Tompkins County Worker’s Center (www.tcworkerscenter.org) has a Living Wage Employer project. It calculates that at the moment a living wage in their area is $14.34. (There are plenty of expert economists and mathematicians around town to keep the figures up to date.)
Any employer in the county can sign the Center’s pledge of $14.34. The employer gets a decal for its window and positive local publicity. So far, 102 employers are in the program. Some are churches, non-profits and public agencies that are sensitive to popular opinion. Others are private employers who are sensitive to their customers and their owners.
The program—here is its unique feature–is voluntary. Of course, just as the Center gives favorable publicity to the participants, it can lobby those employers that do not participate. A related feature of this program is not so much the $14.34, but the process of getting the decals in the windows. The process, The Working Catholic believes, is the real goal. Or say it this way: The process is what creates the favorable outcome.
Ideally the process of the living wage campaign is about nurturing community. Center leaders meet with, let’s say, the trustees of a congregation or the board of an agency or the managers of a private business. The Center explains its program and once the decal is in place, it encourages those trustees, board members and managers to meet and patronize others in the program. Plus, the beneficiaries (the $14.34 workers) are encouraged to shop at stores that are living wage certified. The program is effective to the extent that people feel they are part of a commonweal.
Just as a community is important among those who live, shop and work in the area, so too an internal community is crucial to a worker center. The leaders of a worker center must grow in perseverance and competence, sustained by reflection on their success and failure.
A worker center is somewhat new. It borrows from the old settlement house model, but it is not a place for comprehensive social services. It borrows from the labor movement, but a worker center does not and cannot engage in collective bargaining. It is not a legal clinic, though it knows labor law, immigration policy and more. It is not a multi-issue community organization with institutional members, though it networks with many community groups. Though it helps individual families, a worker center is an aggressive advocacy group around issues related to family life and work. Interfaith Worker Justice (www.iwj.org) here in Chicago serves as a hub for many worker centers.

Droel edits INITIATIVES (PO Box 291102, Chicago, IL 60629), a newsletter about faith and work.

Rehabbing Foreclosed Houses

The Working Catholic:
by Bill Droel

I moved into Chicago’s Marquette Park neighborhood in the late 1970s and within seven years bought the home there in which my family still resides. Neighborhood stability and the quality of housing were of concern in the 1970s and with ebbs-and-flows remain so today.
Prior to the real estate collapse of 2008, we were plagued by sub-prime lenders who deceived immigrant homebuyers. Thus, from the late 1990s and into the early years of this century our community organization, Southwest Organizing Project (www.swopchicago.org), made regular visits to those culpable lenders. I recall one Saturday when we went to a storefront loan office on Cicero Ave. bearing a nationally-known name. The manager who greeted us, I was surprised to see, was a young woman I had known since her grammar school days. She had no prior experience in real estate or in banking and thus, unsurprisingly, had no acceptable answers to our questions. On another day, in the company of our local bishop and many neighbors, SWOP took a walk and put a symbol on each property owned by a specific predatory lender. (No, we did not graffiti the property; it was a warning symbol.)
The international real estate collapse of 2008 hit our neighborhood hard. Late that year SWOP, which has 33 institutional members (several churches, a synagogue, a Muslim network, schools and agencies), produced a neighborhood map with a dot on each foreclosed property. Except for the 320-acre park area and some industrial property, the dots nearly blotted out the entire map. (For those who know Chicago: The map covers east of Midway Airport to Western Ave.; from 55th St. on the north to Marquette Park itself on the south. This map, by the way, proved useful to those attorneys representing our neighbors in eviction court. Despite their disgrace from the 2008 collapse, a handful of nationally-known banks continue to haunt our neighborhood with their zombie-like properties.)

SWOP leaders started to think about getting ahead of the problem. They decided to get into the housing rehab and rental business. As a pilot area, those leaders picked what until recent years was called the Lithuanian Corridor, a few blocks within the southeast corner of our neighborhood.
Back when I came to Chicago (the late 1970s) the Lithuanian Plaza was a fun spot—at least for me. Dinner in one of the small restaurants was hearty and inexpensive. A big wave of Lithuanian-Americans arrived in Chicago early in the 1900s. Many worked in the stockyards and related industries. In fact, the well-known novel about those stockyards, The Jungle by Upton Sinclar (1906), featured a Lithuanian-American protagonist. (For an update, get Slaughterhouse: Chicago’s Union Stockyard by our former neighbor Dominic Pacyga, University of Chicago Press, 2015.) In recent years several absentee landlords owned the houses in the former Lithuanian-American area. Then came the predatory lender invasion; a favorite tasty restaurant gave way to a shuttered storefront, other businesses closed and eventually the foreclosed houses appeared. The only remnants of a once vibrant Lithuanian-American community are a motherhouse for Sisters of St. Casmir, Draugas newspaper office several blocks away, a museum over on Pulaski Rd. and a monument in the park.

To meet its initial goal of reclaiming 100 housing units, SWOP sought help from Brinshore Development (www.brinshore.com), Local Initiatives Support Corp. (www.lisc-chicago.org), Neighborhood Housing Service (www.nhschicago.org) and the local affiliate of Industrial Areas Foundation, United Power (www.united-power.org).
In late May of this year my family, along with about 120 of our neighbors and some visitors from other areas around Chicago, gathered in the well-kept St. Adrian Catholic church in SWOP’s initial target area. The purpose was to launch an expansion of the rehab project to eventually total 70 blocks. SWOP estimates a need for $10million to complete this second phase. There was excitement at the meeting when LISC Chicago immediately pledged $1million.

Eviction has spillover effects, as Matthew Desmond compellingly details in Evicted: Poverty and Profit in the American City (Penguin Random House, 2016). The foreclosure crisis in SWOP’s target section of our neighborhood, for example, was accompanied by private school closings, an uptick in crime statistics and general transience. Thus, SWOP’s challenge of finding $9million is in a sense not the top priority. Hardware alone does not get us ahead; in itself it does not make for neighborly conviviality, for safety, or for educational attainment. SWOP wisely makes a priority of one-by-one relationships and consequently reports some reduction in crime in its original target area and somewhat improved standard test results in nearby public schools. Can the software side of neighborhood rehab continue along with the hardware side? And, is there some way SWOP’s success can be replicated elsewhere in our city? To be continued…

Droel edits a printed newsletter about faith and work, INITIATIVES (PO Box 291102, Chicago, IL 60629). To offset misinterpretation about our neighborhood, allow me to quickly share that over the first 20 years after our purchase, the value of our home increased three-fold. This period included the run up to the recession; then we took a hit. Now, the property value is back again to more than two and one/half times our original purchase.

Pope Francis addresses Italy’s AFL-CIO

On June 28, Pope Francis addressed Italy’s CISL/Confederation of Trade Unions, an umbrella organization of labor unions much like America’s AFL-CIO. The pope had much to share, especially for those of us called to pursue justice in the labor movement. The Holy Father observed that today’s market economy is anti-union precisely because it has cast off ethical and social responsibilities.

The capitalism of our time does not understand the value of the labor union, because it has forgotten the social nature of the economy, of the company. This is one of the greatest sins. Market economy: no. We say social market economy, as Saint John Paul II taught us.

Read more

Ohio AFL-CIO, Catholic Conference help beat back move to deny workers’ comp to immigrants

This year some Ohio legislators proposed excluding undocumented workers from workers’ compensation protections. Not so fast, said the Ohio AFL-CIO and the Buckeye state’s Catholic bishops. Both joined the chorus community groups, immigrant organizations, safety advocates and others fighting this unfortunate and counterproductive proposal. (Since workers’ compensation insurance premiums are based on a company’s claims history, forbidding undocumented workers from filing claims would create an incentive to hire more of them!) Congratulations to the Ohio labor movement and Church for this important act of witness.

Unions bargain for “sanctuary workplaces”

Catholic social justice advocates are well familiar with the concept of “sanctuary,” from its ancient expression in Mosaic Law, to the Sanctuary movement of the 1980s that protected refugees fleeing violence in Latin America, to the present movement for “sanctuary cities” that prioritize protecting immigrants over deporting the undocumented. Now labor journalist David Bacon has published an article about how unions are working to make the workplace a sanctuary for undocumented immigrants.

Perhaps most interesting are the efforts to bargain protective language into contracts. Bacon describes how the hotel workers’ union in Oakland, UNITE HERE Local 2850, is seeking contract language requiring employers to notify the union immediately in the event of an immigration raid – and to deny ICE agents access to the premises if they lack a warrant. CLICK HERE to read Fighting for the Sanctuary Workplace: Unions Mobilize to Protect Undocumented Workers in its entirety.

Cardinal Cupich calls for “an ethic of solidarity”

Cardinal Blase Cupich

In April, Cardinal Blase Cupich delivered an important address at Loyola University Chicago, reflecting on the legacy of his famous predecessor Cardinal Joseph Bernardin. Bernardin had earned fame in some circles – and notoriety in others – for promoting the idea of a consistent ethic of life that bound together Catholic teaching on life issues such as abortion, euthanasia, war and the death penalty. By insisting on preserving the integrity of Catholic teaching against the tides of political division, Bernardin called on us to make sure our faith identity, not our partisan attachments, came first in our lives. Cardinal Cupich, reflecting on the signs of the times, told his listeners:

I am convinced that just as Cardinal Bernardin proposed that an ethic of life be consistently applied to unite all life issues, we need in our day to mine the church’s social teaching on solidarity… an ethic of solidarity, consistently applied to the full range of issues that impact our human living, has the potential of reshaping the debate at a time the nation and the world are deeply divided, and vulnerable to influences that only deepen the fears at the heart of that division.

A “consistent ethic of solidarity” linking our concern with the unborn, the immigrant, and the displaced worker holds great promise as a form of Christian witness in our polarized political climate. Cardinal Cupich’s address was published in Commonweal in May; our friend Michael Sean Winters offered a thoughtful commentary in his Distinctly Catholic blog at the National Catholic Reporter.

New Bill Seeks to Protect Farmworkers from Deportation

Our friends in the United Farm Workers and the National Farm Workers Ministry are urging support for the Agricultural Workers Program Act, a bill designed to help the workers who harvest our foods secure legal residency. The bill, submitted to Congress in May, would enable undocumented workers who can demonstrate they have worked 100 days in US agriculture for two years can obtain a “blue card” conferring legal status. Law-abiding farmworkers who continue to work in agriculture would eventually be able to earn a green card and permanent legal residency. These men and women, whose backbreaking labor feeds all of us, deserve our protection. CLICK HERE to email your legislative representatives to support this bill.

Eviction

The Working Catholic
by William Droel

An imprecise distinction can be made between the working poor and the poor; between episodic poverty and persistent poverty; between functional poverty and totally debilitating poverty. Matthew Desmond compelling portrays the downward slide from “stable poverty” to “grinding poverty” in his study of housing in Milwaukee, titled Evicted: Poverty and Profit in the American City (Penguin Random House, 2016). Although several interdependent factors weave in and around his report, Desmond shows that eviction causes poverty (not the other way around). Further, eviction is contagious—each one dragging relatives and neighbors into deeper poverty. And, each eviction degrading nearby housing and putting stress on nearby institutions.

From one perspective those working poor who slide into deep poverty can be faulted. Some of them abuse drugs; some choose irresponsible sexual partners; some physically attack a partner or friend and some are into petty crime. Desmond is upfront about self-defeating behavior, including buying premium food items rather than staples, investing too much in pets (or in one case, keeping a cat with an asthmatic child), and seeking advice (legal, parenting or spiritual advice) from people who obviously have failed. However, Desmond is patient as he explores the psychology of those on the margin, that tenuous area between working poverty and desperate poverty, between unpleasant housing and eviction.
He finds “a hazy depression” on the downside of that divide. Eviction saps confidence and convinces people that they are destined to be poor forever. Those sliding down are overtaken by small tangible problems and lose any appetite for political agency. A righteous observer, including an elected official or a minister in Desmond’s story, can say that a person is poor because she frivolously spends her money on steak or lobster. The other way around is probably more accurate: The person spends frivolously because she is poor.

Desmond goes inside the daily experience of landlords—vividly in one case. This woman is intelligent and clocks many hours. She is enterprising, acquiring her first 36 rental units within four years. She uses each property as collateral for a loan on the next. She is compassionate in some situations, or so it can seem.
Yet, the landlord welcomes each new tenant to one or another apartment that has a door off its hinges and/or a cracked window and/or serious plumbing issues and/or mold and/or furnace problems. Why? First, as Desmond explains, because landlords (at least in Milwaukee) are “allowed to rent units with property code violations…as long as they were upfront about the problems.” Second, because landlords know it is “cheaper to deal with the expense of eviction than to maintain their properties.” The eviction court processing fee is $89.50. Third, these landlords can sometimes make more money from an eviction (by way of penalties and a lien, for example) than from collecting delinquent rent. This is why some landlords, including one of Desmond’s main subjects, do not screen out apartment seekers who have prior evictions or misdemeanors. Though it is counter-intuitive, there is “a business model at the bottom of every market.” Providing housing for the poor is only a sideline in the model that Desmond details.
The essential character of Desmond’s principal landlord, along with the nature of this business, is gradually revealed. Early in the book she is whining about a tenant who is $30 short on monthly rent. She is more disturbed, however, because of an earlier “bad job for the painting.” The tenant, the reader learns, is disabled. At one point the landlord agrees to forgive $260 in back rent in exchange for painting the apartment. Upon inspection, the landlord reneges on the agreement with a passive-aggressive sentence containing two profane adjectives. Eventually, the tenant is evicted.
What this landlord says about her purchases of foreclosed houses applies to her attitude toward tenants: “You know, if you have money right now, you can profit from other people’s failures.” Yet for all her aggravation and irregular hours, this landlord gains unappealing rewards: a modest home and occasional gambling excursions to the Caribbean.

These predatory landlords, famously including Jared Kushner (see N.Y. Times Magazine, 5/28/17), are impervious to moralizing. They are part of a larger business and a culture that, as Desmond explains, goes back to the late 1400s. In the modern economy “piles of money [can] be made by creating slums” and thereby compounding poverty. Through the detailed stories of a handful of Milwaukee individuals, Desmond opens readers’ minds to the bigger dynamics of real estate and poverty.

Are there alternatives to exploitative rent situations? A subsequent blog will present some positive examples.

Droel edits INITIATIVES (PO Box 291102, Chicago, IL 60629), a newsletter about faith and work.

Breakthrough for Worker Justice at Fordham U.

The big news in Catholic employment relations this month: Fordham University President Joseph McShane, SJ announced that out of respect for Catholic social teaching on the rights of workers the university would not oppose their adjuncts if they wished to form a union and bargain collectively.

Adjunct faculty at universities across the United States, Catholic and secular, have sought to form unions in recent years to remedy low pay, poor benefits, and job insecurity. Some Catholic universities, such as Georgetown and Trinity Washington, have adopted a neutral stance, leaving the decision to the workers themselves – a stance conforming with Church teaching on the right of workers to join trade unions. Others, however, such as nearby Manhattan College, have refused to recognize and bargain with adjunct unions – and then invoked First Amendment protections to escape legal consequences, seeking to associate “union avoidance” practices with the preservation of religious freedom.

Fordham adjuncts and administrators spent the spring in tense confrontations over the instructors’ union aspirations, and it often seemed that Fordham would follow the example of Manhattan, Duquesne and other schools denying employees their right to organize. But instead, after a long process of discernment, Fr. McShane announced in an email:

After much consultation and reflection, I have decided that the University will not oppose the unionization of adjunct faculty. As you receive this email, we have initiated discussion with the union over the University adopting a stance of neutrality regarding the organization of our adjunct faculty.

I have become convinced of the rightness of this course of action over the last few months by conversations with my fellow Jesuits. After all, organized labor has deep roots in Catholic social justice teachings. And though this is an issue that many universities are facing—not all of which have come to the same decision—given its Jesuit traditions and historic connection to first-generation and working-class students, Fordham has a special duty in this area.

(The complete text of the email can be found online courtesy of Georgetown’s Kalmanovitz Initiative.) We at the Catholic Labor Network applaud Fr. McShane and the Fordham administration on this important decision, and the witness it offers to Catholic business leaders nationwide. We fervently hope and pray that this begins a new chapter in labor relations at the university, one of mutual respect and cooperation for the common good.

In other news: The NLRB has announced that Manhattan University adjunct faculty voted 59-46 for union representation! Well, it may not be “news” news – the faculty voted in 2011, but the Manhattan administration’s legal arguments kept the ballots impounded for six years. Now that Manhattan knows that its adjunct instructors want union representation, will they honor their employees’ choice? Perhaps the vote results, and events at Fordham, will provide the Manhattan administration aids to discernment as well.

Supreme Court: Catholic Hospital Employee Pensions Not Protected by Federal Law

In 1974, Congress passed ERISA – the Employee Retirement Income Security Act – to protect worker pensions from employer default. Under ERISA, employers need to set aside money in a trust fund to cover future pension checks, so innocent retirees don’t get hurt if their employer has an unexpected cash crunch, or even goes bankrupt.

Congress exempted “church plans” from the law, an exemption that Catholic hospitals also claimed. Unfortunately, a number of Catholic hospitals have used that exemption to skimp on necessary pension contributions for their nurses, techs and other staff. Their retirement trusts are woefully underfunded, and some hospital workers have sued, arguing that hospitals are not churches and must meet ERISA funding requirements.

In Advocate Health Care Network v. Stapleton, a decision that also covered Dignity Healthcare of California and St. Peter’s of NJ, the court unanimously agreed that Catholic and other religiously-affiliated hospitals are exempt from ERISA. Some are celebrating Advocate Health Care v. Stapleton for as an important legal victory for religious freedom. Be it so: but what lesson are lay business leaders taking from this? That it’s OK to raid your workers’ pension fund if you can get away with it?

Too many executives at for-profit corporations are already disposed to do anything the law allows to their workers or consumers, just or not, if it boosts profits. Unless Catholic employers model better behavior, they are Catholic in name only.