Workplace Information Forcing: Constitutionality and Effectiveness

Source: Charlotte Alexander, American Business Law Journal, Vol. 53, 2016

From the abstract:
“Know-your-rights” posters are ubiquitous in the American workplace, as employers are required by statute or regulation to display numerous notices about workers’ rights on the job. These posters were relatively uncontroversial until a recent set of lawsuits by employer groups attempted, on statutory and constitutional grounds, to block rules that would require notices about workers’ rights to form a union and bargain collectively. The lawsuits have produced mixed results in the courts. Using these recent cases, as well as the few prior cases that challenged other notice posting rules, this article addresses the constitutionality of workplace notice posting requirements. It then examines the effectiveness of notice posting rules, considering how such rules might best be structured to accomplish their first-order goals of informing workers about their rights and their second-order goals of spurring enforcement action to improve the conditions of work.

Vulnerabilities of Low-Wage Workers and Some Thoughts on Improving Workplace Protections: The Experience of the Workplace Justice Project

Source: Luz M. Molina, Andrea Agee, Erika Zucker, Loyola University New Orleans College of Law Research Paper No. 2016-12, August 7, 2016

From the abstract:
This article explores the landscape of low-wage work in the South and the experience of the Workplace Justice Project at the Loyola University New Orleans College of Law’s Stuart H. Smith Law Clinic and Center for Social Justice. It focuses on the history of the Project as a response to the influx of low-wage, primarily Hispanic, workers, that came to New Orleans in the months and years after Katrina to help with the re-building of the city.

The National Pension Crisis: A Test in Law, Economics, and Morality

Source: Donald C Carroll, University of San Francisco – School of Law, University of San Francisco Law Research Paper No. 2016-23, 2016

From the abstract:
This article explores the national retirement income security crisis. While the current arguments about how to meet the crisis portray the problem as both financial and political, this article concedes that America’s workers do not have financial and political arguments for making their November-December years secure. They do have, however, a strong moral argument which needs to be explicitly acknowledged so that the crisis is not seen solely as one of finance or political will.

This article explores in some detail how the three-legged stool of private/public pension plans, personal savings, and Social Security is failing to provide a fundamental minimum of security for too many people. The language of the Judeo-Christian tradition inherent in Catholic Social Teaching is employed. The article argues that adequate security for old age is an inherent part of a living wage. In addition, the author asserts that neither private employers nor the taxpayers are entitled to the labor of employees who have to face their last years with inadequate security. The article does not propose any particular solution in new laws or policy because the province of moral criticism is to evaluate the effects of laws and policies both old and new.

Retirement Security Legislation in the States

Source: Anna Petrini, LegisBrief, Vol. 24 no. 44, November 2016
(subscription required)

Even as they are living longer, many Americans—especially those working in the private sector— are not saving enough to ensure a comfortable retirement. Concerned about costs for public assistance programs if their citizens retire into poverty, states have begun exploring a spectrum of policy solutions to avert a retirement savings crisis.

State Auto-IRA Programs: The Keys to Financial Self-Sufficiency

Source: Alicia H. Munnell, Anek Belbase and Geoffrey T. Sanzenbacher, Center for Retirement Research at Boston College (CRR), IB#16-19, December 2016

The brief’s key findings are:
– State auto-IRA programs for private sector workers are intended to pay for themselves.
– This goal is achievable in the long run, but auto-IRAs will incur losses initially.
– The keys to financial self-sufficiency are to:
– keep per-account costs low;
– set meaningful participant contribution rates; and
– charge higher fees initially or finance start-up costs over a longer period.

2017 – Economic Report of the President together with the Annual Report of the Council of Economic Advisers

Source: Executive Office of the President and Council of Economic Advisers, January 2017

As the 2017 Economic Report of the President goes to press, the United States is eight years removed from the onset of the worst economic crisis since the Great Depression. Over the two terms of the Obama Administration, the U.S. economy has made a remarkable recovery from the Great Recession. After peaking at 10.0 percent in October 2009, the unemployment rate has been cut by more than half to 4.6 percent as of November 2016, below its pre-recession average. Real gross domestic product (GDP) per capita recovered fully to its pre-crisis peak in the fourth quarter of 2013, faster than what would have been expected after such a severe financial crisis based on historical precedents. As of the third quarter of 2016, the U.S. economy was 11.5 percent larger than at its peak before the crisis. As of November 2016, the economy has added 14.8 million jobs over 74 months, the longest streak of total job growth on record. Since private-sector job growth turned positive in March 2010, U.S. businesses have added 15.6 million jobs. Real wage growth has been faster in the current business cycle than in any since the early 1970s. Meanwhile, from 2014 to 2015, median real household income grew by 5.2 percent, the fastest annual growth on record, and the United States saw its largest one-year drop in the poverty rate since the 1960s…

A Tale of Two Retirements: As working families face rising retirement insecurity, CEOs enjoy platinum pensions

Source: Sarah Anderson and Scott Klinger, Institute for Policy Studies, December 2016

Key findings:
This report compares the retirement assets of top CEOs with those of all African-American, Latino, female-headed, and white working class households.

– Just 100 CEOs have company retirement funds worth $4.7 billion — a sum equal to the entire retirement savings of the 41 percent of U.S. families with the smallest nest eggs…..
– On average, the top 100 CEO nest eggs are large enough to generate for each of these executives a $253,088 monthly retirement check for the rest of their lives…..
– With nearly $3 billion in special tax-deferred accounts, Fortune 500 CEOs stand to gain enormously from Trump’s proposed tax cuts on top earners…..
– The retirement asset gap between CEOs mirrors the racial and gender divides among ordinary Americans…..

Related:
Saving for Retirement Is a Struggle—Unless You’re a CEO
Source: Alexander Sammon, Mother Jones, December 16, 2016

A hundred execs have as much retirement savings as 116 million Americans combined.

Removing the Legal Impediments to Offering Lifetime Annuities in Pension Plans

Source: Jonathan Barry Forman, Pension Research Council Working Paper, WP2016-6, August 2016

from the abstract:
Longevity risk–the risk of outliving one’s retirement savings–is probably the greatest risk facing current and future retirees in the United States. At present, for example, a 65-year-old man has a 50 percent chance of living to age 82 and a 20 percent chance of living to age 89, and a 65-year-old woman has a 50 percent chance of living to age 85 and a 20 percent chance of living to age 92. The joint life expectancy of a 65-year-old couple is even more remarkable: there is a 50 percent chance that at least one 65-year-old spouse will live to age 88 and a 30 percent chance that at least one will live to 92. In short, many individuals and couples will need to plan for the possibility of retirements that can last for 30 years or more.

One of the best ways to protect against longevity risk is by securing a stream of lifetime income with a traditional defined benefit pension plan or a lifetime annuity. Over the years, however, there has been a decided shift away from traditional pensions and towards defined contribution plans that typically distribute benefits in the form of lump sum distributions rather than as lifetime annuities, and people rarely buy annuities in the retail annuity market. All in all, Americans will have longer and longer retirements, yet fewer and fewer retirees will have secure, lifetime income streams.

There are a variety of ways that the federal government could promote greater annuitization of retirement savings. In particular, government policies could be designed to increase retirement savings, for example, by requiring employers without pension plans to at least offer automatic payroll-deduction IRAs to their employees. The government could also encourage workers to remain in the workforce longer, for example, by increasing the early and normal retirement ages associated with Social Security and pensions. Government policies could also be designed to get workers to preserve their retirement savings until retirement, for example, by discouraging premature pension withdrawals and loans.

The federal government could also do more to promote annuitization. One approach would be for the government to mandate that retirees use at least a portion of their retirement savings to purchase annuities or similar lifetime income guarantees. Alternatively, the government might only want to encourage annuitization. For example, the government could require plan sponsors to include annuities or other lifetime income mechanisms in their investment options and/or in their distribution options. The government could also provide additional tax benefits for individuals who receive income from lifetime annuities and lifetime pensions, for example, by completely exempting lifetime income payments from income taxation or favoring them with a reduced tax rate. The federal government could even get into the market of selling annuities. In any event, the government could make it easier for plan sponsors to offer annuities and deferred income annuities, for example, by letting plan sponsors rely on insurance regulators and industry standards to oversee and monitor annuity providers. The government could also promote better financial education about annuities and other lifetime income options.

Finally, in addition to promoting annuities, it could make sense to broaden the range of permissible lifetime income products–especially low-cost products that pool risk among participants, as opposed to products that necessitate high premiums to compensate insurance companies for their guarantees and profits. In that regard, for example, TIAA’s College Retirement Equities Fund (CREF) offers a variety of low-cost variable annuities that pool risk among participants. So-called “defined-ambition plans” like those in operation in the Netherlands offer another way to share risk among plan participants.

All in all, modest changes in the laws and regulations governing pensions and annuities could go a long way towards helping to promote secure, lifetime retirement incomes.

Census Bureau Releases 2015 Income and Poverty Estimates for All Counties

Source: U.S. Census Bureau, Press Release, Release Number: CB16-TPS.153, December 14, 2016

Today, the U.S. Census Bureau released the latest findings from its Small Area Income and Poverty Estimates program. The program provides the only up-to-date, single-year income and poverty statistics for all counties and school districts — roughly 3,140 counties and over 13,000 school districts nationally.

The tables provide statistics on the number of people in poverty, the number of children younger than age 5 in poverty (for states only), the number of children ages 5 to 17 in families in poverty, the number of children younger than age 18 in poverty, and median household income. At the school district level, estimates are available for the total population, the number of children ages 5 to 17 and the number of children ages 5 to 17 in families in poverty.

These findings are a combination of the latest data from the American Community Survey with aggregate data from federal tax records, the Supplemental Nutrition Assistance Program, Bureau of Economic Analysis, Supplemental Security Income, decennial censuses and the Population Estimates Program.

Highlights:
– Based on estimates for all 3,141 counties, 14.0 percent of counties (440) had a statistically significant increase in median household income from 2014 to 2015 when adjusting for inflation. In the same period, 1.6 percent (51 counties) had a statistically significant decrease in their median household income.
– Based on poverty rate statistics for all 3,141 counties, 1.5 percent of counties (46) had a statistically significant increase in poverty rates and 7.8 percent (244 counties) had a statistically significant decrease for all ages from 2014 to 2015.
– Among the 13,245 U.S. school districts, the median estimated poverty rate for school-aged children was 16.5 percent in 2015. Additionally, for all U.S. school districts 37.3 percent (4,935 school districts) had a school-aged poverty rate greater than 20.0 percent.
– Between 2007 (prior to the most recent recession) and 2015, 10.8 percent of counties (338) had a statistically significant increase in their median household income when adjusting for inflation. During the same period, 14.8 percent (464 counties) had a statistically significant decrease in their median household income.
– Between 2007 and 2015, 18.1 percent of counties (569) had a statistically significant increase in their poverty rate for all ages. During the same period, 2.0 percent (63 counties) had a statistically significant decrease in their poverty rate.

Change in Median Household Income by County: 2014 to 2015
December 14, 2016
Map showing percent change in median household income by county for 2014 to 2015.
Change in Median Household Income by County: 2007 to 2015
December 14, 2016
Map showing percent change in median household income by county for 2007 to 2015.

The Shifting Sands of Employment Discrimination: From Unjustified Impact to Disparate Treatment in Pregnancy and Pay

Source: Deborah L. Brake, University of Pittsburgh – School of Law, University of Pittsburgh Legal Studies Research Paper No. 2016-36, December 13, 2016

From the abstract:
In 2015, the Supreme Court decided its first major pregnancy discrimination case in nearly a quarter century. The Court’s decision in Young v. United Parcel Service, Inc., made a startling move: despite over four decades of Supreme Court case law roping off disparate treatment and disparate impact into discrete and separate categories, the Court crafted a pregnancy discrimination claim that permits an unjustified impact on pregnant workers to support the inference of discriminatory intent necessary to prevail on a disparate treatment claim. The decision cuts against the grain of established employment discrimination law by blurring the impact/treatment boundary and relaxing the strictness of the similarity required between comparators in order to establish discriminatory intent. This article situates the newly-minted pregnancy discrimination claim in Young against the backdrop of employment discrimination law generally and argues that the Court’s hybrid treatment-by-impact claim is in good company with other outlier cases in which courts blur the boundaries of the impact/treatment line. The article defends the use of unjustified impact to prove pregnancy discrimination as well-designed to reach the kind of implicit bias against pregnant workers that often underlies employer refusals to extend accommodations to pregnant workers. While Young is not likely to prompt an earthquake in employment discrimination doctrine, this article identifies and defends a parallel development in the law governing pay discrimination that similarly incorporates unjustified impact into a disparate treatment framework. This move has already begun in some lower courts and is a central feature of the primary focal point of legislative reform, the proposed Paycheck Fairness Act. As is the case with pregnancy discrimination, pay discrimination largely stems from implicit judgments devaluing women as workers rather than conscious decisions to disfavor women because of their sex. Importing the Young theory of unjustified impact into the pay claim is necessary to make it a more viable tool for reaching the kind of bias that manifests as pay discrimination in the modern workforce. The insights developed in this article from exploring the theory and doctrine in Young provide support for the parallel development that is on the cusp of taking hold in the equal pay claim. The article concludes with some thoughts about why, given the malleability in fact, if not in judicial rhetoric, of the treatment and impact categories, disparate treatment provides the preferable grounding for these developments. Doctrinal advantages aside, the disparate treatment framing of pregnancy and pay discrimination claims best resonates with the social movement work of contesting the gender ideologies at the heart of these injustices.