Month: April 2018

Workplace Hazards in the Tech Economy

The titans of the tech economy want us to believe that among their achievements is the transformation of the workplace into a more humane and nurturing environment. This accounts for the frequent stories about headquarters campuses with endless amenities and flexible work arrangements.

It’s often another story when you look beyond those glittering complexes to the more mundane sites where the routine work is done. The manufacturing, distribution and customer service facilities that prop up the tech companies have a lot in common, in a bad way, with their old economy counterparts.

The latest indication of that reality comes in the 2018 edition of the National Council for Occupational Safety and Health’s Dirty Dozen list of employers that put workers and communities most at risk. The council is a federation of local COSH groups that for nearly 50 years have been promoting safer workplace practices.

This year’s Dirty Dozen includes two new-economy corporations that work hard to portray themselves as enlightened: Amazon.com and Tesla Motors.

Amazon makes the list because of a series of fatal workplace accidents at its warehouses over the past five years. The report points out that the facilities create hazards by demanding that workers maintain a dangerously intense pace of work in order to service the company’s rapid delivery system. One Amazon center in Pennsylvania became infamous for having paramedics stationed outside full-time to deal with the frequent cases of dehydration and heat stress.

Violation Tracker’s summary page for Amazon lists 17 OSHA fines totaling $208,675 – but most of those come from its Whole Foods subsidiary. Amazon’s distribution and fulfillment centers don’t have more entries because many of their workers are technically employees of temp agencies and leasing firms.

Tesla makes the Dirty Dozen list because National COSH found that its injury rate was 31 percent higher than the rest of the automotive industry and its rate of serious injuries was 83 percent higher. The report cites a series of articles about the safety problems at Tesla, including a Los Angeles Times story stating that Tesla had an accident rate greater than notoriously unsafe industries such as sawmills and slaughterhouses, despite being much more automated.

Tesla’s reported accident rate may actually be understated. The Center for Investigative Reporting’s Reveal project found that Tesla failed to include some of its serious injuries on legally mandated reports.

Among the reasons Amazon and Tesla have been able to get away with their unsafe practices is the absence of unions in their U.S. facilities. Both companies have succeeded, so far, in beating back labor organizing campaigns by employing the argument that workers at a supposedly enlightened company do not need a third party to represent them.

The truth, of course, is that unions are not really third parties but instead an expression of the desire of workers to present a united front in dealing with management. When it comes to employers such as Amazon and Tesla, that collective action may be the only way to ensure that workers can get through the day in one piece.

Profits Before Safety

The passengers who survived Southwest Flight 1380’s engine explosion are feeling lucky to be alive and grateful for the skilled landing executed by pilot Tammie Jo Shults. Another group feeling relief are the top executives of Allegiant Air. If the accident had happened to one of their planes, the carrier’s survival might be in question.

That’s because of the revelations contained in a remarkable 60 Minutes investigative report on Allegiant that aired on April 15th. Correspondent Steve Kroft described the culture of the budget carrier as one that puts profits before safety and that discourages pilots from reporting mechanical problems with their aircraft. The piece documented an alarming pattern of aborted takeoffs, cabin pressure loss, emergency descents and unscheduled landings during Allegiant flights.

In one incident Allegiant, whose executives refused to be interviewed by 60 Minutes, fired a pilot who made an emergency landing when smoke appeared in the cabin and then ordered passengers to exit rapidly through escape chutes once the plane was on the ground.

To its credit, 60 Minutes did not focus only on Allegiant. It also investigated why a carrier with such a checkered track record was still allowed to fly. The answer turned out to be that the Federal Aviation Administration has during the past few years adopted a less confrontational enforcement approach.

Kroft grilled John Duncan, the FAA’s head of flight standards, who went through extraordinary verbal contortions to avoid saying anything negative about Allegiant’s record. Duncan insisted that each incident was addressed separately and refused to acknowledge there was any pattern of misconduct. Duncan is a living embodiment of that new FAA approach, which involves quietly cooperating with carriers to fix problems rather than pressuring them with large fines and other public sanctions.

The FAA has not abandoned monetary penalties entirely. In Violation Tracker, Allegiant has eight entries from the agency, the largest being a $175,000 fine from 2015 for drug testing deficiencies. Penalties like that are fine for routine infractions, but something a lot more punitive is needed when a company has the kind of dismal record attributed to Allegiant.

Higher fines are just part of what is needed at the FAA. The agency should return to an adversarial posture and compel rogue carriers such as Allegiant to take safety issues seriously.

It won’t be easy for the FAA to change its course, since the Trump Administration and Congressional Republicans are on a crusade against just about every kind of regulation. The latest maneuver is the use of the Congressional Review Act, an obscure law employed last year to undo rules adopted by the Obama Administration during the prior 12 months, to eliminate a longer-standing one: the 2013 Consumer Financial Protection Bureau regulation barring auto lenders from charging minority customers higher interest rates.

This obsession with dismantling the so-called administrative state has gone beyond all justification and is putting the population more and more at the mercy of unscrupulous companies.

Don’t Read Their Lips

There have been times during the past 14 months when some people might have been tempted to regard big business as part of the anti-Trump resistance, based on the public stances that some chief executives have taken in response to the president’s more outrageous statements. A new report from Oxfam America shows that large corporations are not putting most of their money where their mouths are.

The Oxfam analysis compares the public rhetoric of 70 large U.S. corporations on topics such as immigration, diversity and climate change to the issues listed in their federal lobbying spending disclosures. It finds that most companies spent little or no money lobbying to reinforce their high-minded pronouncements.

Instead, they dispatched their armies of lobbyists to press for government action that would promote their own corporate self-interest, primarily through rollbacks in regulation and business taxes. For example, of the 70 companies only 13 (most tech firms) lobbied on diversity and inclusion, spending a total of $11 million. By contrast, 61 of the 70 lobbied on tax issues, spending a total of $44 million.

As Irit Tamir, Oxfam’s Director for the Private Sector, puts it: “Today’s CEOs have more appetite to align their company’s public image with specific sides in some of the country’s most contested and polarized debates. On issues ranging from gay marriage to refugee rights, executives across  industries have been pushed – or willingly walked – into the eye of the political storm. But when we look at what they are lobbying on behind closed doors, they really, really, really want to pay less in taxes while other issues take a back seat. Words matter, but actions – and lobbying dollars – still speak louder.”

Oxfam, which has done considerable work on corporate tax avoidance, finds it particularly troubling that so much of big business influence spending promotes policies that undermine public finance and contribute to the growth of inequality.

That’s certainly a valid point, but the report’s findings also highlight the reality that much of what is presented as corporate social responsibility is actually a smokescreen for more selfish practices. There is a parallel between this deception and that of the president.

Trump pretends to be a populist while actually promoting much of the conventional big business agenda. Corporate social responsibility proponents pretend to be social reformers while quietly lobbying for that same agenda. Moreover, the social responsibility initiatives themselves are often little more than image-burnishing measures and in some cases are designed to convey the dangerous message that voluntary corporate practices make stricter government regulation unnecessary.

The lesson from all this is that we should not pay too much attention to what either Trump or the big business reformers say and instead focus on what they are doing, which is to steadily dismantle the systems of regulation and taxation that are meant to keep predatory capitalism in check.

Good Corp, Bad Corp

Like many others in Trump’s America, big business seems to be confused on where it stands. One minute it is receiving its dream list of tax cuts and regulatory rollbacks, the next minute it is being attacked by the president for real or imaginary transgressions.

Trump’s corporate villain du jour is Amazon.com, which he has criticized for supposed offenses such as cheating the U.S. Postal Service. As with Trump’s other Twitter tirades, any grain of truth in his position is overwhelmed by a torrent of incoherent and misdirected accusations and insults.

Amazon certainly has a lot to answer for. The online behemoth has gone a long way in supplanting Walmart as the country’s most controversial retailer. The labor practices in its distribution centers are horrendous. It is decimating small business. Most recently, it is conducting a competition among 20 localities for a second headquarters campus that will supposedly create 50,000 jobs, signaling that it expects a giant subsidy package from the winner. Some places are ponying up offers in the billions, setting the stage for a future fiscal disaster.

Trump has focused on none of these issues in his tweetstorms against Amazon. He did mention the issue of sales tax collection, though his critique was out of date. After years of refusing to collect taxes in most parts of the country, Amazon has made agreements with state governments yet is still not collecting the local component in many places and is not requiring the third-party vendors that use its website to add taxes on their sales.

It is unclear whether Trump’s complaint about Amazon’s arrangement with the Postal Service has any validity, given that the terms are confidential. What seems to be inaccurate is the claim that the USPS is losing money on the packages its delivers for Amazon, which is enabling the post office to make use of excess capacity.

The problem is that Trump’s sloppy criticism is prompting many people to jump to the defense of Amazon, which doesn’t deserve all the support. The Washington Post, separately owned by Amazon CEO Jeff Bezos and probably the real target of Trump’s wrath, should be defended for its critical reporting on a corrupt administration. Yet even if Trump is incapable of making the distinction, others should not feel that rising to protect the free press requires one to also take the side of a corporate cousin involved in very different activities.

The Amazon situation is a symptom of a larger problem. Trump’s potshots against various companies amount to fake corporate campaigns that may be making it more difficult for real campaigners to get their message across — in the same way that Trump’s ham-fisted tariffs are complicating things for legitimate fair trade activists. To the extent that his fake criticisms engender pro-corporate responses, Trump could end up strengthening the position of big business.

If Trump were smarter, one might think that was his intention all along.  More likely, it just another aspect of the chaos in which we must now live.