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February 2000, Volume 7, Number 2

Economy, Unions

The US unemployment rate remained at a 30-year low of 4.1 percent in December 1999 as the US economy continued on its longest-ever expansion—107 months as of February 2000. The economy grew for 106 months from 1961 through December 1969.

Unemployment averaged 4.2 percent in 1999, down from 4.5 percent in 1998 and the lowest rate since 1969, when it was 3.5 percent. The unemployment rate averaged eight percent for Black workers in 1999, and 6.4 percent for Hispanics—both rates were down significantly from 1998 rates of 8.9 and 7.2 percent in 1998.

Testifying before the Senate Banking Committee in January 2000, Federal Reserve chief Alan Greenspan said: "Not only in high-tech and in the farm area but throughout the country, aggregate demand is putting pressure on an ever decreasing supply of unemployed labor. One obvious means one can use to offset that is expanding the number of people we allow in, either generally or in focused areas. I think an appraisal of our immigration policies in this regard is on the table. I recognize there are huge problems associated with that, such as the question of the social safety net we have in this country, which is very substantial. It would be obviously inappropriate to open up our immigration capabilities to people who did not come to work."

"But all the experience that I've seen suggests that people seeking to come to the United States are coming for jobs and the opportunities we have here. I don't therefore perceive that as more than a theoretical problem. So I think that reviewing our immigration laws in the context of the type of economy that we will be enjoying in the decade ahead is clearly on the table."

The Bureau of Labor Statistics reported that the number of union members rose by 265,000 in 1999 to 16.5 million, or 13.9 percent of US workers. About 37 percent of union members are government employees, compared to 9.4 percent of private sector workers. Union leaders said they added 600,000 members in 1999, including 75,000 home-health workers in California and 65,000 Puerto Rican public employees; the net gain of 265,000 reflected the loss of members to retirement and job cuts. About 13 million of union members—79 percent—belong to unions affiliated with the AFL-CIO.

The Federal Reserve in January 2000 reported that the median net worth of US families rose from $60,900 to $71,600 between 1995 and 1998—net worth is the value of a family's assets in such things as bank accounts, stocks and a house, minus the family's liabilities for home mortgages, car loans and credit card debt. Median family pretax income rose to $33,400 in 1998, up from $32,700 in 1995—the median income in 1998 dollars was $32,800 in 1989. The data are from interviews with 4,309 families.

About 13 percent of US families had incomes below $10,000 in 1998, 25 percent had incomes of $10,000 to $24,999, and 29 percent had incomes of $25,000 to $49,999—64 percent of families had incomes below $50,000. About 25 percent of families had incomes of $50,000 to $99,999, and nine percent had incomes above $100,000.

The Center for Immigration Studies released a study based on Census data that found that the percentage of immigrants who are self-employed fell between 1960 and 1997, from 14 to 11 percent. The percentage of US workers who were self-employed rose from 11 to 12 percent over these years. Self-employment rates tend to rise with education and years in the US—the arrival of large numbers of poorly educated immigrants in the 1990s may have lowered self-employment rates.

Sanctions. The AFL-CIO is expected to vote in February 2000 on a resolution, supported by the Hotel Employees and Restaurant Employees International Union, the Service Employees International Union, and Unite, that calls for an amnesty for most of the estimated six million unauthorized migrants in the US and an end to employer sanctions—the resolution calls for the money now spent on sanctions enforcement to be spent to enforce wage and safety laws. Unite, the union of Needletrades, Industrial and Textile Employees representing 300,000 workers, estimates that 20,000 of its members may be unauthorized.

The manager of the Holiday Inn Express in downtown Minneapolis in October 1999 called the INS to check on the status of the hotel's 16 workers. They voted in favor of union representation in August 1999, and the manager called them into his office one by one where an INS official checked their work authorization status just before negotiations were to begin. The INS arrested nine workers and the union protested that the Holiday Inn was using the INS to discourage collective bargaining.

The union paid the $3,000-a-person bail to have the workers released while they await deportation hearings and then filed charges with the NLRB accusing Holiday Inn of retaliating against the workers for engaging in union activities. The INS and the NLRB have an agreement that the INS will not be used to retaliate against workers engaged in union activities.

In January 2000, the Holiday Inn Express made a $72,000 settlement with the Equal Employment Opportunity Commission on behalf of the nine workers, awarding each $1,000 in compensatory damages and $7,000 in back pay; this was the first settlement under the new EEOC policy that extends protection against discrimination to all workers in the US, including unauthorized workers. Sen. Paul Wellstone (D-MN), asked the INS to let the workers stay in the United States because they helped NLRB and EEOC.

Robert Bach, executive associate commissioner for policy and planning at the INS, says that the Minneapolis incident should not have happened: "when a lead comes in, the local INS office needs to search out whether there is a potential to be misused, and that's what did not happen in Minneapolis." Bach said that the $1.9-million settlement with Filiberto's, a Phoenix restaurant chain that admitted recruiting undocumented workers, represents what the INS wants to do— punish employers.

Many unions complain that under current circumstances, sanctions have become a pro-employer weapon used to discourage union organizing by focusing on workers rather than employers. Organizers say that migrants "understand very clearly [that] if you are involved in trying to bring in a union, you put your job in jeopardy." Instead of calling the INS, the employer can simply "review" worker records and ask for confirmation of Social Security Numbers or other information.

Some employers use mis-match letters from the Social Security Administration— letters that say that a worker's SSN does not match what is on file— as an excuse to fire pro-union workers. In March 1998, some 93 workers at a dried-food factory, Zoria Farms Inc. in San Jose, voted to be represented by Local 428 of the United Food and Commercial Workers Union. Zoria said that it had received notice from the SSA that 50 of the workers' SSNs were invalid; Zoria told these 50 they would be terminated unless they could produce valid SSNs.

After a move by some unions, including the United Farm Workers, to urge the AFL-CIO to endorse an end to sanctions in October 1999, the AFL-CIO appointed a committee chaired by the president of the Hotel Employees and Restaurant Employees to study the issue of employers using the INS to intimidate workers seeking union representation. The INS in FY97 investigated 5,361 of the 569,000 companies with more than 20 employees operating in the United States and fined 888, or 16 percent, for violating employer sanctions laws—either knowingly hiring illegal workers or not completing I-9 forms on new hires.

The US Supreme Court in 1984 confirmed alien workers illegally employed in the US are protected by labor relations laws, but reversed the NLRB in the Sure-Tan case, ruling that employers who unlawfully fired unauthorized workers violated the NLRA, but could not be required to reinstate them because they had already been removed by the INS to Mexico. The Supreme Court said: "If undocumented alien employees were excluded against employer intimidation, there would be created a subclass of workers without a comparable stake in the collective goals of their legally resident co-workers, thereby eroding the unity of all employees and impeding effective collective bargaining."

The court also reasoned that if employers were ordered to reinstate unauthorized workers who were outside the US, a remedy for labor law violations might frustrate the competing goal of deterring illegal immigration.

Several federal courts have since held that Sure-Tan's bar to the traditional remedies of back pay and reinstatement applies only in cases where the unauthorized workers have left the US. These courts reasoned that the Supreme Court did not require reinstatement because it did not wish to encourage illegal entry. For example, one court noted that if back pay for illegally fired unauthorized workers were not required, unauthorized workers would be "an easy target for employers resisting union organization, and thus frustrate the rights of lawful US workers under the NLRA." However, an employer ordered to reinstate an employee fired unlawfully does not have to do so until the employee can show that she is legally in the US.

In Los Angeles, One Stop Immigration, which has helped thousands of immigrants become citizens and which advocates union membership, has so far defied orders issued in December 1999 by the National Labor Relations Board to provide back pay and reinstate two workers, who were fired in late 1997 in retaliation for their union activities. One Stop appealed an Administrative Law Judge's decision that the workers be reinstated and lost; it has refused to comply in part because it is running out of funds, having lost state and city funding that once subsidized citizenship classes and other services.

Other. The number of strikes has been declining. There were 36 strikes annually involving 1,000 or more workers in the 1990s, compared to an average of 300 a year in the 1970s—during 1952, there were a peak 470 major strikes. Many observers say that President Reagan's 1982 firing of air traffic controllers who went on strike illegally led a new and tougher attitude by US employers, who began to permanently replace striking workers. Instead of calling strikes, unions today are more likely to engage in public relations campaigns to persuade employers to remain neutral during organizing drives or they aim to persuade individuals and businesses not to deal with labor law violators.

The anti-sweatshop movement centered on US college campuses is taking credit for pressuring companies such as Nike and the Gap to require contractors abroad not to use child labor and to raise wages and reduce work weeks. Charles Kernaghan of the National Labor Committee said "There has been some improvement on the ground, but nowhere near significant enough." Nike, which uses 565 footwear and apparel factories employing 500,000 workers in 46 countries, says that conditions have improved markedly.

Nancy Cleeland, "Unionizing Is Catch-22 for Illegal Immigrants," Los Angeles Times, January 16, 2000. Reconsidering Immigrant Entrepreneurship: An Examination of Self-Employment Among Natives and the Foreign-Born. Camarota, Steven A. and Mark Krikorian. 1999. The Impact of Immigration on the U.S. Labor Market. In Albert Fishlow and Karen Parker. Eds. 1999. Growing Apart: The Causes and Consequences of Global Wage Inequality. Council on Foreign Relations Press.