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Labor Pains In The New Economy
As the nation's economy evolves from a manufacturing to an information and services based-economy, some high-tech industry representatives and lawmakers say labor laws and policies are becoming out of sync with the information age.
"We need to undertake an entire look at how the federal government attempts to regulate the workforce and the workplace considering we're in the 21st century," said Rep. John Boehner, R-OH, chairman of the House Education and the Workforce Committee's employer-employee relations subcommittee.
The issue has taken on new scrutiny in recent months with a series of advisories and regulations that have emerged from the Labor Department that have angered the high-tech industry, other business interests and some lawmakers.
One now-rescinded advisory included in a letter to an employer said that employers were responsible for ensuring that home offices comply with federal health and safety regulations. The department also suggested in an advisory opinion letter issued in February 1999 but made public earlier this year that employers must include stock option profits in hourly workers base pay for the purposes of calculating overtime compensation. The department also has been criticized for proposed regulations requiring employers to institute ergonomics programs to prevent work-related problems such as repetitive stress injuries.
There also is a lingering debate over whether the nation is training and educating enough skilled workers to meet the needs of high-tech companies and others. Several bills have been introduced in Congress that would address the issue in the short term via immigration by increasing the availability of temporary visas for skilled foreigners to work for U.S. companies, while focusing on the long term with proposed increases in funding for training and education of domestic workers.
Some lawmakers and industry officials say the nation's labor laws and regulations need to be adjusted to address the changes in the workplace and workforce.
But others say organized labor is part of the problem, arguing the unions are resistant to change out of fear that laws that allow employers more flexibility will undermine efforts to attract more union members.
"The traditional constituents (of the Labor Department) are labor unions, and labor unions are resistant to change," particularly when it comes to globalization and automation, said Rep. James Moran, D-VA.
Old Laws Governing A New Economy
Some of the nation's most basic labor laws were written decades ago, such as the Fair Labor Standards Act (FLSA) enacted in the late 1930s, which established basic standards for wages and overtime pay. Industry representatives and lawmakers who advocate some adjustments say the relationship between employers and employees has changed, particularly given today's tight labor market.
Many of the new jobs being created by the high-tech industry and others are no longer centered on manufacturing, but instead are focused on innovation. The explosion of Internet-based companies has created a new class of workers who jump from one job to the next seeking not only challenging work but the best compensation packages, many of which are based on stock in the company.
"We're no longer making buggy whips," said Rep. Randy "Duke" Cunningham, R-CA. "We're into an Internet world."
Industry representatives say they expect more problems to emerge, such as the controversies over home offices and telecommuting, as policy makers continue to put 21st century workforce questions "into the box of Depression-era laws," according to Sandra Boyd, assistant vice president for human resources policy for the National Association of Manufacturers.
Boyd and others say they believe some parts of the Labor Department understand that there are problems, while others don't. They argue that part of the problem stems from the fact that labor unions are opposed to tinkering with what they view as fundamental worker protections.
The department is "driven from two directions: it's bureaucratic inertia" and organized labor, said Thom Stohler, director of human resources policy for the American Electronics Association. "Labor views the [National Labor Relations Act] and the FLSA as crown jewels and are suspicious of any changes, especially if they are coming from the business community. And so it makes any changes to either act extraordinarily difficult…it leads to situations like the stock options letter."
When asked whether there is room for modifications, Jeffrey Miller, communications director for the Communication Workers of America, which has attempted to unionize some high-tech companies, argues that many of the adjustments to current labor law favored by the business community and their GOP allies in Congress would roll back essential protections. He points to proposed legislation that would allow workers and management to meet on non-collective bargaining issues such as safety, which Republicans have tried unsuccessfully to pass in recent years.
"The attempts to change the laws have been to weaken workers rights," Miller said.
Some high-tech representatives and lawmakers say that many of the recent controversies might have been anticipated or avoided if the department had a high-level official focused on labor issues affecting the digital economy.
"Most of these laws were written at a time when the Internet did not exist," said Rep. Zoe Lofgren, D-CA. "I don't think the Labor Department [is made up of]…bad people. They do need assistance in understanding the new issues."
Harris Miller, president of the Information Technology of Association of America, has urged Labor Secretary Alexis Herman to appoint a "new economy" adviser.
"We just want common sense," Miller said. "That's why I recommended that [the department appoint] someone who will have more of a [high-tech] industry perspective" on issues.
The department was forced to back off of its original opinions on the stock options and home office issues after being blasted by the business community and lawmakers, who threatened legislative action.
On the home office issue, the department rescinded its advisory letter and issued a new compliance directive last month to its employees saying that home offices will not be subject to health and safety regulations. Still, some lawmakers have indicated that they will continue to pursue a legislative fix to ensure the department does not backpedal. Rep. Tom Davis, R-VA, introduced a bill, H.R. 3518, that would amend the Occupational Safety and Health Act so that it would not apply to work performed via a telephone, computer or other electronic devices.
The department has said its hands are tied under the FLSA on the stock options issue. But Labor officials insist that they do not want to limit the ability of hourly workers to receive stock options. Department officials have acknowledged that a legislative fix is needed and have been working on a bill with Cunningham, Davis, Moran and others in the House along with Sen. Mitch McConnell, R-KY, in the Senate.
Seth Harris, counselor to Labor Secretary Herman, said the department is up to the task of ensuring U.S. workers are getting the skills they need to compete for the new jobs being generated by the growing industries such as high-tech and biotech. He pointed to successes the department has had in retraining dislocated workers. He noted that the department has launched several programs, such as its online job bank and government-private sector partnerships, to help train workers.
"I think there is a perpetual process of applying laws to new circumstances," Harris said in an interview. "We do find laws that need to be amended" to deal with such issues as the stock options controversy. But he added that "the fact that changes at times are needed does not signal and should not signal that the laws are fundamentally flawed."
But Cunningham and Davis question the ability of the current department to make the necessary changes and say that real reform will not occur without a change in administration.
Lofgren, however, said even with a change in party control at the White House much of the bureaucracy will stay behind at the department
Are Unions Out Of Touch?
Critics of organized labor say unions have had difficulties adapting to the new economy. They point to struggles in unionizing high-tech companies as evidence. Industry representatives argue that given the higher wages enjoyed by high-tech workers and benefits such as stock options, they have little need for a union to fight for additional benefits, particularly when employers are competing with each other to attract workers.
"Labor has tried to organize the high-tech industry for the past 10 years with very little success," NAM's Boyd said. High-tech workers "feel like they are invested in the company and don't need unions, in many instances, to be a voice. They feel they have a voice and are valued."
Miller, with CWA, said unions have recognized the need to adjust to the times. He said his union is attempting to prepare its members to be better suited to changing workforce needs by providing training in the Internet, information technology and other areas.
On its difficulty in organizing the high-tech industry, Miller argues that it is not unusual for workers in a young, booming industry to be disinterested in organized labor. He points to the cable industry as an example, saying its workers also were slow to embrace unions but as the industry matured, workers realized the need for more job security.
"It's difficult to organize any new company or industry no matter what it is," Miller said.
He added that despite what the industry says, there are pockets of dissatisfaction among high-tech workers, noting the recent strike among technical workers and engineers at Boeing.
Miller said that his union is seeing new interest in organizing among groups of workers at some of the most successful high-tech companies such as temporary workers at Microsoft and lower-skilled employees at Amazon.com involved in fulfillment and other areas.
Incremental Change May Be Best Approach
Even though Boehner and some others argue for a sweeping overhaul of the nation's labor laws, even they will concede it is unlikely to happen any time soon. Boehner, however, said he promises to try.
Instead, some advocate incremental change as the most effective approach.
"Where the 21st century workplace is butting up against 1930s work rules, there is a possibility we'll see incremental individual changes because people will say 'that's not what we meant,'" but that's what the law says, said Joe Karpinski, spokesman for the Senate Health, Education, Labor and Pensions Committee.
Rep. Robert Andrews of New Jersey, the top Democrat on the House Education and the Workforce Committee's employer-employee relations panel, said he believes the nation's labor policies are "fundamentally right." But he added that "there are some adjustments that would better fit the needs of the new economy."
As examples, Andrews pointed to provisions he helped add to legislation, H.R. 3846, passed by the House earlier this month calling for an increase in the minimum wage. One would amend the FLSA to allow certain sales people who primarily work in the office or at home using the telephone or Internet to reach customers to be exempt from overtime pay rules. Current law only exempts traditional sales people who physically travel to their customers. The other provision would update the definition of a computer professional to account for those who work in Internet and other new information technology jobs for the purpose of determining who is exempt from over-time pay requirements.
The Clinton administration, however, has come out against the provisions included in H.R. 3846, saying they would weaken overtime protections for U.S. workers.
AEA's Stohler said the Labor Department's response to the controversy over the stock options issue is a good sign, noting it may be the most effective model for how to adapt the nation's labor laws to the new economy.
"It's case by case," said Stohler. "We'll have to make the case for why each change should be made."
 | - by Juliana Gruenwald |
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