Richard Kirsch

Roosevelt Institute Senior Fellow

Recent Posts by Richard Kirsch

  • Shared Security: A New Deal for the New Century

    Jul 6, 2015Richard Kirsch

    If Social Security, the minimum wage, unemployment insurance, and the 40-hour workweek laid the foundation for the middle class in the 20th century, what would be the equivalent for the 21st century? The odd couple of a billionaire entrepreneur and a labor leader have come up with what could be a breakthrough proposal for rebuilding the middle class.

    If Social Security, the minimum wage, unemployment insurance, and the 40-hour workweek laid the foundation for the middle class in the 20th century, what would be the equivalent for the 21st century? The odd couple of a billionaire entrepreneur and a labor leader have come up with what could be a breakthrough proposal for rebuilding the middle class.

    Nick Hanauer, who made his fortune as an early Amazon investor, and David Rolf, the head of an SEIU local that has successfully organized tens of thousands of home care workers, detailed their plan for Shared Security in Democracy Journal.  The proposal aims to restore the foundation of the middle class: economic security.

    Hanauer and Rolf create a fictional young worker named Zoe to personify how working people in the new economy live in constant economic insecurity. Zoe works part-time as a hotel manager and supplements her income driving for Uber, working as a gardener, and renting her apartment on Airbnb. Still, she has no benefits and struggles to pay the rent and keep her car running. She doesn’t have the time or money to finish her college degree and wonders whether it would be worth the loans even if she did. When Zoe rents out her apartment, she stays with her parents, who also did not go to college. But her parents, who have had regular full-time employment over the course of their lives, look forward to a retirement made secure by a modest pension, some savings, Social Security, and Medicare.

    As Hanauer and Rolf write, “Zoe’s parents entered the workforce with the expectation that hard work would be rewarded with decent pay, improving prospects, and a comfortable retirement…This was the social contract of the 1950s, ’60s, and ’70s…But for Zoe’s generation, this contract no longer exists.”

    The new 21st century social contract they propose is based on giving Zoe’s generation middle class security, which they emphasize is the engine of our economy.  Hanauer and Rolf write, “the middle class is the source of all growth and prosperity in a modern, technological economy and economic security is the essential feature of what it means to be included in the middle class.”

    Just as FDR’s New Deal was founded on raising labor standards and providing social insurance, Hanauer and Rolf’s plan is based on Shared Security Standards and a Shared Security Account. The two combine to modernize basic labor standards and to extend existing and new social insurance to all workers, including part-time employees and those who employers consider independent contractors.

    The new labor standards would include: a livable wage (a higher minimum wage) and guarantees of overtime pay; pay equity; fair scheduling of work; and the right to use paid sick time, family leave, and vacations, which would be financed from each employee’s Shared Security Account.

    The breakthrough innovation in the proposal is establishing a Shared Security Account for every worker. Each employer would pay the share of benefits earned by each worker into those workers’ accounts based on a 40-hour week. In other words, an employer would pay all the benefits for a full-time employee while paying half the benefits for someone who works for that employer 20 hours a week.

    Each employer would pay its share of existing benefits required by the federal government or states, including Social Security, Medicare, an employer contribution toward health care, unemployment insurance, workers’ compensation, and disability. In addition, the employer would be required to pay for new benefits, including paid sick days, family leave and vacation, and a contribution to a 401(k)-type retirement account.

    The authors rightly celebrate the positive impact of their proposal for American workers. It would turn the trend toward contingent, part-time, temporary, and shared work from a recipe for continuous financial insecurity to a foundation for middle-class security.

    What they don’t explore is how their Shared Security system would significantly slow down the work trends that their proposal addresses. Looking again at Zoe, the hotel management company keeps her at 29 hours a week to avoid paying benefits. But when that financial advantage is taken away, or reduced significantly if the company voluntarily offers a higher benefit level to full-time employees, the company would be much more likely to employ Zoe full-time. In doing so, the company would gain the advantages that come with a full-time employee: less need for training, lower turnover, a better work attitude, and company loyalty.

    As The New York Times reported last month, we are already seeing some startup tech companies, which Hanauer and Rolf say use the contingent model to support innovation, realizing that it makes better business sense to hire full-time employees. For both low-wage employers and startups, Shared Security will lead firms to use the contingent work model more when it makes sense for delivering a better product and less as a way to cut labor costs.

    All of which reinforces the authors’ potent economic and political analysis, which is that assuring that every job is a good job is not only fair, it is the driver of economic growth. Raising wages, providing time to care for yourself and your family, and having affordable health insurance and retirement security is not just about being fair, and it’s not just about rewarding workers for their contributions to a business. It’s the exact opposite of conservative economic theory. At its root, it recognizes that people with the security of a good, middle-class job drive our economy forward. 

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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  • NYC Taxi Owners Are Denying Benefits to Drivers. The City Council Can Stop Them.

    Jun 25, 2015Richard Kirsch

    Earlier this month, the New York City Council enacted basic protections for workers at car washes, one group of exploited, largely immigrant workers. Next up on the City Council’s to-do list should be reversing a court decision that robbed taxi drivers, another group of mostly immigrant workers, of health and disability benefits.

    Earlier this month, the New York City Council enacted basic protections for workers at car washes, one group of exploited, largely immigrant workers. Next up on the City Council’s to-do list should be reversing a court decision that robbed taxi drivers, another group of mostly immigrant workers, of health and disability benefits.

    New York City’s taxi drivers are one more group of workers who decades ago were legally considered employees but now are classified as independent contractors, with low and unpredictable wages, long work hours, and no benefits. Over the last two decades, taxi driving has become a career for many new immigrants.

    Starting in 1996, drivers began organizing together, through the New York Taxi Workers Alliance, to win an increased share of cab fares and other protections. Two years ago, the Taxi Workers Alliance organized successfully to get the Taxi and Limousine Commission, which regulates the industry, to designate six cents from every cab ride to a fund to pay for disability and health benefits for drivers.

    The Taxi Workers Alliance, through an RFP process, won a contract to set up a fund that would provide a modest disability payment of $350 for 26 weeks, plus other benefits, such as vision, dental, and hearing. Drivers would still be responsible for their own health insurance, with many relying on the Affordable Care Act.

    Even though the fund does not cost the taxi owners a dime, they still sued to stop it, arguing that the commission overstepped its authority, and earlier this month a New York State appeals court agreed. As Bhairavi Desai, the Executive Director of the Taxi Worker Alliance, told me, the owners saw the health and disability fund “as a basis for the union…They were hell-bent on stopping the union and having the drivers have any benefits.”

    An irony of the court’s ruling is that one reason that taxi drivers are considered to be independent contractors by the National Labor Relations Board (NLRB) is that they work in a highly regulated industry, in which many of their pay and working conditions are regulated by the Taxi and Limousine Commission. But when the commission acted to fund a much-needed benefit, the court, at the behest of the owners, blocked the way. The court said that it was up to a legislative body to decide on a new policy like using fares to finance a health and disability fund.

    The other reason that the NLRB considers the drivers to be independent contractors is that they cruise for riders instead of being dispatched by the taxi companies. This in contrast with drivers of “black cars” in New York, who are dispatched by the limousine companies and therefore legally under their control. Some of the limousine drivers have joined the machinists union (IAMAW).

    Looking into the future, competition from services like Uber may push New York’s cab companies to adopt an app for riders to call cabs. Earlier this month, the California Labor Commissioner’s office ruled that an Uber driver there was an employee, in part because of Uber’s reliance on apps.

    For now, the court’s decision puts the issue squarely in front of the New York City Council. Since their election in 2013, both New York City Mayor Bill de Blasio and the new progressive majority on the council have made bolstering the ability of low-wage workers to care for and support their families a hallmark of their policies. One of their first actions was to strengthen a new law requiring that workers receive paid sick time. The new regulations establishing worker and environmental protections at car washes are the latest such action.

    Laws that improve wages and benefits for New York’s working families are not only fair, they are a fundamental strategy to move New York’s economy forward. The more New Yorkers have the ability to care and support their families, the more New York will build a middle class that is the basis for strong communities and an economy not wholly dependent on Wall Street.

    With some $2 million already collected and a contract with the Taxi Worker Alliance signed, passing an ordinance to approve using the six cents per fare for the health and disability fund should be an easy fix. But the taxi industry in New York is profitable and powerful and finances election campaigns. Still, that’s why New York City has public financing of campaigns and a pro-worker and pro-community mayor and City Council. Hopefully, they’ll quickly step up to the plate so that New York City’s taxi drivers can have their own organization provide essential benefits for their and their families’ health. 

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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  • The Economic Narrative in Hillary Clinton’s Launch Speech

    Jun 16, 2015Richard Kirsch

    In her campaign launch speech on Roosevelt Island, Hillary Clinton talked about her fight for an “economy that works for everyday Americans, not just those at the top.” That rallying cry is becoming the core economic message of more and more Democrats.

    In her campaign launch speech on Roosevelt Island, Hillary Clinton talked about her fight for an “economy that works for everyday Americans, not just those at the top.” That rallying cry is becoming the core economic message of more and more Democrats. In their announcement speeches, Bernie Sanders called for “an economy that works for all and not just the one percent,” and Martin O’Malley for “an American economy that works again for all of us.”

    That may seem just rhetoric, but it’s an important advance. The story of an economy, government, and democracy that work for all of us, not just the wealthy, has proven to have tremendous narrative power. Seeing the Democratic candidates embrace it is a major advance, particularly since a huge communications weakness of Democrats—unlike Republicans—is that they each think they need to say different things.

    But stories need more than a quest; they need to be able to explain who the villains are and what they did wrong, who the heroes are and how they realize the quest. What is the rest of the story in Clinton’s address, and how much of it does she get right?

    Near the top of her speech, Clinton contrasts an economy that works for all with trickle-down theory: “Instead of an economy built by every Americans, for every Americans, we were told that if we let those at the top pay lower taxes and bend the rules, their success would trickle down to everyone else.”

    Who were the ones telling us that—the villains of the story, who were pushing trickle-down? Unfortunately, for a speech that mostly is progressive, Clinton begins by bolstering austerity economics. Her first villains are Republicans, whom she blames for squandering “surpluses that could have eventually paid off our national debt,” noting that “Republicans twice cut taxes for the wealthiest, borrowed from other countries to pay for two wars, and family incomes dropped.”

    This is bad economics in a very confused narrative. Tax cuts on the rich and government borrowing are not the causes of stagnant wages. And by putting balanced budgets on a pedestal, Clinton undercuts the centrality of government spending to pulling the economy out of a recession, creating jobs, and investing in the policies she calls for later in her speech. Instead, her story supports austerity policies. Yes, it’s true that tax cuts on the rich rob the government of money to invest in job creation and exacerbate income inequality. But that view is buried under the “balance the budget” frame.

    Later in her speech, Clinton blames Republicans who “trip over themselves promising lower taxes for the wealthy and fewer rules for the biggest corporations“ and “pledge to wipe out tough rules on Wall Street, rather than rein in the banks that are still too risky, courting future failures.”

    Clinton is looking to tap into popular resentment against the forces behind those Republican actions without assigning those forces responsibility. Another example: “You see corporations making record profits, with CEOs making record pay, but your paychecks have barely budged.” The passive language in that last clause hides what’s really going on: corporations reward CEOs while pushing down wages.

    On the other hand, the one time Clinton actually puts the blame squarely on the economic villains is at a key moment in her story. Here, repeating a key theme of the Roosevelt Institute’s “Rewriting the Rules” report, she says that rather than solely blaming “advances in technology and the rise of global trade” on “displaced jobs and undercut wages,” she points her finger at Wall Street. “The financial industry and many multi-national corporations have created huge wealth for a few by focusing too much on short-term profit and too little on long-term value…too much on complex trading schemes and stock buybacks, too little on investments in new businesses, jobs, and fair compensation.”

    So if “top-down economics” doesn’t work, what does? Clinton declares, “I’m running to make our economy work for you and for every American.” But while she provides a long list of policies to do that, all of which would be positive, she doesn’t explain an organizing idea that contrasts with trickle-down. Democrats need that, because without it, they don’t have an understandable narrative to compete with the Republican story about businesses being the job creators and government regulations—even those that people like—hurting business and the economy.

    Fortunately, we have that organizing idea, which O’Malley supplies in one simple phrase: “A stronger middle class is not the consequence of economic growth—a stronger middle class is the cause of economic growth.”

    This is the same powerful, organizing idea that we communicate in the progressive economic narrative when we say, “working families and the middle class are the engines of the economy,” and that billionaire businessman Nick Hanauer and Eric Liu explain by saying, “we build the economy from the middle-out, instead of trickle-down.”

    Clinton declares correctly that, “Growth and fairness go together. For lasting prosperity, you can’t have one without the other,” but she doesn’t explain why. It’s an easy but crucial step to make the point that policies that are fair, like raising the minimum wage, are key to boosting the economy by putting more money into people’s pockets to spend in their communities.

    This missing explanation would give more umph to the superheroes in Clinton’s story: hard-working Americans. “You worked extra shifts, took second jobs, postponed home repairs… you figured out how to make it work…You brought our country back.” It would be an easy and transformative lift for her to explain to Americans that they are not just heroes for working through the pain. They are heroes because when they have good jobs and can care for and support their families, they drive the economy forward.

    Clinton concludes her speech with her version of the progressive meta-narrative, “we all do better when we all do better.” She says, “we’re a better, stronger, more prosperous country when we harness the talent, hard work, and ingenuity of every single American.” That’s not just a statement of values, but a story about how we build that better, stronger, more prosperous country.

    This early in the presidential race, Clinton is a few key steps from telling a powerful story about how we can build an America that works for all of us, not just the wealthy and powerful—the kind of story that, like the one told by FDR, can move the country to meet our biggest challenges. Those steps include not repeating conservative economic ideas because they are popular and not flinching from naming today’s “economic royalists,” in FDR’s language. The key is helping everyday Americans understand the economics behind why they are truly the heroes of our story.   

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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  • Why Democrats Should Worry About Republicans' Newfound Economic Populism

    May 7, 2015Richard Kirsch

    It would be a huge mistake for Democrats to dismiss the newfound economic populism of Republican presidential candidates as obviously laughable given Republicans’ deep alliance with corporate America. Republicans are aiming to pull off a populist jiu jitsu, using anger at corporate influence over government to justify even more dismantling of government. It could work.

    It would be a huge mistake for Democrats to dismiss the newfound economic populism of Republican presidential candidates as obviously laughable given Republicans’ deep alliance with corporate America. Republicans are aiming to pull off a populist jiu jitsu, using anger at corporate influence over government to justify even more dismantling of government. It could work.

    The good news for progressives is that attention to the squeeze on the middle class and the capture of government by corporations is finally taking center stage in American politics. Pollsters for both political parties are advising candidates to recognize the struggle of families to meet the basics, and the cynicism about government being able to do anything about their problems because it's under the control of the rich and powerful corporations.

    This should be a huge opening for Democrats who are aggressive in assigning blame to corporations and pushing for what should be the obvious solution: stand up to those powerful forces with tough measures. If the banks are screwing homeowners, government should enact regulations that stop bank rip-offs and make housing affordable. If corporations and the rich are profiting from huge loopholes in the tax code, close those loopholes and raise their taxes.

    But Republicans on the campaign trail are offering a different solution: if government is captured, then shrink government. Marco Rubio laid it out most clearly in an interview on NPR:

    And so I hope the Republican Party can become the champion of the working class because I think our policy proposals of limited government and free enterprise are better for the people who are trying to make it than big government is. The fact is that big government helps the people who have made it. If you can afford to hire an army of lawyers, lobbyists and others to help you navigate and sometimes influence the law, you'll benefit. And so that's why you see big banks, big companies, keep winning. And everybody else is stuck and being left behind.

    Rand Paul, who champions free-market, anti-regulatory economics, began his announcement speech for president by declaring, "We have come to take our country back from the special interests that use Washington as their personal piggy bank, the special interests that are more concerned with their personal welfare than the general welfare."

    And Carly Fiorina bounced off the scourge of Wall Street abuses, Elizabeth Warren, to turn around Warren’s argument: “Crony capitalism is alive and well. Elizabeth Warren, of course, is wrong about what to do about it. She claims that the way to solve crony capitalism is more complexity, more regulations, more legislation, worse tax codes. And of course the more complicated government gets — and it's really complicated now — the less the small and the powerless can deal with it."

    It’s easy to laugh at their argument, which can be reduced to “if the fox is getting into the hen house, tear down the hen house.” But it would be foolish to do so. It starts where people are at, as one Republican message guru wrote after the election last fall: “[F]rom the reddest rural towns to the bluest big cities, the sentiment is the same. People say Washington is broken and on the decline, that government no longer works for them — only for the rich and powerful.”

    The argument takes advantage of the record-high public distrust of government, reached in no small part because of decades of Republicans stripping government’s effectiveness at tackling problems and championing shrinking government and cutting taxes as the solutions for everything.

    Having said that, the current political environment should still be winning turf for Democrats who are willing to tell their own version of the problem and solution. After all, building a hen house that keeps out the foxes is clearly a better way to be sure you get fresh eggs for breakfast. But winning the debate will take something Democrats are not always willing to do: naming villains and pushing solutions that will really address the problems facing American families.

    As I wrote in a column analyzing the messages that Democrats who won used last fall, naming specific villains is essential to demonstrating that the candidate understands who is responsible for the problem and is willing to stand up to those powerful forces. Because of our campaign finance system, this is more of a challenge for Democrats. If they actually take on the rich and powerful, it will result in less campaign cash. Republicans don’t have to worry about that, since their patrons understand the game.

    Having named the villains, Democrats then need to propose bold solutions that demonstrate that they understand the depth of the problems people face, solutions that people can imagine might actually help. Naming bold solutions is another way to demonstrate to people that you are willing to take on the status quo.

    In a debate—whether real or the virtual debates of ad campaigns—Democrats will win if they point out that what Republicans want to do is tear down the hen house, and then name the foxes and describe the fortified, fox-slaying house.

    Of course, that’s the biggest question for Hillary Rodham Clinton. Will she name the villains and keep naming them, even though many of them will supply her campaign with funds? Will she advance bold solutions or try to duck tough issues? We know one thing: Vermont Senator Bernie Sanders and the Draft Warren campaign will be making it tough for her to hide.

    It’s a question not just for Clinton, but for every Democrat. Will Democrats be bold enough to advance a politics that meets the despair and cynicism of Americans with directness, honesty, and hope for a better future?

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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  • L.A. Port Truck Drivers Put Their Jobs on the Line for Decent Pay and Cleaner Air

    May 5, 2015Richard Kirsch

    Following the most recent work stoppage by port truck drivers in southern California, Los Angeles Mayer Eric Garcetti announced the formation of a new trucking company, which will be a model for good pay and protecting the environment. The announcement takes the port drivers' ongoing protest of low-wages and exploitative working conditions to a new level.

    Following the most recent work stoppage by port truck drivers in southern California, Los Angeles Mayer Eric Garcetti announced the formation of a new trucking company, which will be a model for good pay and protecting the environment. The announcement takes the port drivers' ongoing protest of low-wages and exploitative working conditions to a new level.

    Eco Flow Transportation’s founding came out of a long-running dispute between port drivers and Total Transportation Services, which had fired some 35 drivers who had filed claims for their unlawful misclassification as independent contractors and for illegal deductions from their paychecks.

    The new company, breaking with the widespread, illegal practice of treating drivers as independent contractors, already employs 80 drivers with a goal of expanding to 500 within a year. The firm promises to be neutral in efforts by its employees to join the Teamsters Union, which has been supporting the drivers’ protests and legal actions against misclassification as contractors.

    Eco Flow also aims to address diesel pollution from port trucks that are not maintained at standards, established in 2008, which aimed at drastically lowering the environmental health threats from the trucks. A court ruling in 2010 effectively placed the cost of maintaining clean trucks on drivers. The port drivers, who are forced by the trucking companies to be “independent contractors,” work an average of 59 hours a week, with take-home pay of under $29,000. The drivers’ low-pay makes it difficult for them to keep trucks at a level to meet clean air standards. But because Eco Flow owns the trucks, it assumes full responsibility for maintaining the fleet’s clean air standards.

    Eco Flow is also working to introduce a new model for the ports, called “free flow” cargo, which can help move cargo out of terminals more rapidly and increase the velocity of Port of Los Angeles terminals. The benefits will be less pollution from idling trucks and less port congestion. More efficient deliveries will also make it easier for the firm to pay the drivers a decent salary. This is a sharp contrast from most port-trucking companies who, by treating drivers as contractors, pay them by delivery and so pass on the cost of idling time to the drivers.  

    What does it take for workers to risk their jobs in actions that often result in retaliation by employers? I talked with Nick Weiner, an organizer at Change to Win, about the transformation that port drivers went through over several years, which led them to go from accepting their status to protesting.

    Q: What has been the barrier to port drivers taking actions?

    Weiner: The Teamsters have tried over the last 30 years but failed because we’ve allowed the illusion that drivers are independent contractors to drive strategies in the past. The drivers had used the language of the boss—calling themselves independent owner-operators. Part of the helping them come together was to use different language, so they could engage one another.

    In ’96 in L.A. there was a big strike. And there were smaller ones. All failed, because drivers didn’t have right language, and didn’t engage government officials to enforce law. We learned our history.

    Sometimes they said, ‘we want to be reclassified as employees.’ But they weren’t saying – ‘we are your employees now.’ That’s what’s needed to go from defensive. It’s not just we want to be employees and everything is fine. It’s by being employees, we can join a union and negotiate a contract. The end is not being an employee; there are a lot of employees not doing well.

    We have this term misclassification—a very wonky, inside-baseball but now it means something. ‘Yea, we know we’re misclassified. It means taking away our rights, employers stealing from us.’ New language has been liberating.

    Q. How do drivers get an understanding of how they could do better through organizing?

    Weiner: Drivers see that [unionized] longshoremen get treated well: they are paid well, get time off. While the drivers sit for hours on line [at the ports], without getting paid. They’ve come to see that the do critical work and are the largest set of workers in the port economy who are left out of the prosperity of the port economy.

    We’ve worked to tie those things together, being employees and the union. They thought they needed to deal with misclassification and then organize. Instead, needed to get them to understand you’re an employee now, you can organize now.

    It takes time for drivers to undo the brainwashing. To engage in collective struggle. 

    The collective struggle has taken two forms. The first has been a series of unfair labor practice pickets, aimed at specific companies, which block access to the ports of those companies trucks. The second is legal action under California law. Drivers have filed more than 400 claims against companies under California’s wage and hour law. The first 19 rulings resulted in an average award of $66,240, largely for wage and hour violations and illegal paycheck deductions for items like truck leases.

    The drivers are also filing complaints with the National Labor Relations Board (NLRB), which governs union organizing.

    Slowly, the organizing is paying off. One firm, Green Fleet, avoided being picketed last week by reaching a comprehensive labor peace agreement with the Teamsters. After a U.S. Department of Labor ruling, another firm, Shippers Transport Express, reclassified its "independent contractors" as employees and in February signed a contract with the Teamsters, which resulted in higher pay and fully paid health care benefits for the drivers.

    The growing militancy of exploited workers, from Uber drivers to Wal-Mart “associates” to home care workers and many more is building a new movement of workers to challenge the 21st century economy, in the same way that workers built the labor movement 100 years ago. Their organizing and militancy helped drive the New Deal economic reforms which built the middle class in the 20th century. The fight of today’s workers is laying the foundation for the reforms we need to rebuild the middle class today in an economy based on good jobs and environmental sustainability. 

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

    Correction: The original version of this post incorrectly stated that the new trucking company would be employee-owned.

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